Annual Report 2010. IFRS Consolidated Financial Statements

GAZPROMBANK GROUPANNUAL REPORT 2010BASED ON IFRS CONSOLIDATED FINANCIAL STATEMENTS

KRASNOYARSK

SURGUT

PERM

JOSHKAR-OLA

STAVROPOL

MOSCOW

KALININGRAD

IRKUTSK

NOVY URENGOI

EKATERINBURG

ASTRAKHAN

NIZHNY NOVGOROD

SHCHELKOVO

ST.-PETERSBURG

YAKUTSK

NOVOSIBIRSK

CHELYABINSK

KAZAN

VOLGOGRAD

KRASNODAR

MURMANSK

VLADIVOSTOK

BARNAUL

UGORSK

SAMARA

SARATOV

LIPETSK

BRYANSK

KHABAROVSK

TOMSK

TYUMEN

ORENBURG

IZHEVSK

CHEBOKSARY

ROSTOV-ON-DON

BELGOROD

YUZHNO-SAKHALINSK

KEMEROVO

OMSK

UFA

UKHTA

MAKHACHKALA

KOSTROMA

TULA

Statement by the Chairman of the Board of Directors 3

Statement by the Chairman of the Management Board 4

Bank Profile 6

Main Events of 2010 and Positioning 6Key Performance Indicators 8Geographic coverage 10Shareholders 12Board of Directors 13Management Board 14

Performance Results and Development Prospects 15

Russian Economy in 2010 15The Russian Banking System in 2010 18Group’s Financial Totals and Performance Indicators 19Development Strategy for 2011-2015 22Participation in Federal and Regional Programs and Projects 23

Classic Banking Services 25

Corporate Business 25Retail Business and E-Services 30Private Banking and Art Banking 32Depository Business 32

Investment Banking 34

Financial Market Transactions 34Project and Structured Finance 35Mergers and Acquisition Advisory Service 37Structured and Syndicated Finance 38Trust Management 39Management of Non-Financial Assets 40

Risk Management 43

Risk Management Framework 43Internal Control System 48Compliance Control in the Bank 50

Corporate Governance 51

Corporate Governance System 51Infrastructure and Regional Network Development 53Personnel and Organizational Development 54IT Development 55Social Responsibility 56

Summary Consolidated Financial Statements 58

Reference Information 72

GAZPROMBANK GROUP2010 ANNUAL REPORTBASED ON IFRS CONSOLIDATED FINANCIAL STATEMENTS

1

Dear Shareholders,

In 2010, GPB (OJSC) not only

achieved the performance measures

established by its Strategic Growth

Plan, but also far exceeded them. The

Bank managed to achieve per for-

mance that is significantly better than

the targeted indicators related to its

assets, capital, loan portfolio, borrow-

ings and profits. Those results have

been achieved during challenging

macroeconomic conditions influenced

by the negative consequences of the

global financial crisis.

The Bank’s day-to-day operations as

well as its growth prospects are closely

tied to the operations of OAO Gazprom.

This company is the Bank’s largest share-

holder and customer. We consider the

Bank as a reliable partner capable of

providing turnkey services at a modern

level to multiple enterprises belonging

to Gazprom Group.

One of GPB’s achievements in re-

cent years has been its involvement

in Gazprom Group’s internal cash flow

management system. Today, the ma-

jority of OAO Gazprom’s subsidiaries,

branches and representative offices

located across several time zones are

included in Gazprom’s cash pooling.

The Bank’s investment and financial ad-

visory services that are provided within

the strategic partnerships established to

implement a series of major projects and

transactions are of great importance for

the Company as well.

Thus, our cooperation with the Bank

is instrumental in optimizing Gazprom

Group’s business and the development

of the Group.

The high performance of the Bank

both in 2010 and since 2006 is the best

confirmation of the correctness of the

strategic course selected by its share-

holders and enables the Bank to set new

ambitious goals.

The primary goal is to further increase

the value of GPB. For this purpose, we

plan to place special emphasis on the

growth of the banking segment and im-

provement of the Bank’s capital structure.

I am sure that by implementing such

a strategy, GPB will further strengthen

its position as one of the leading Russian

banks.

Statement by the Chairman of the Board of Directors

Alexey B. Miller

Chairman of the Board of Directors, GPB (OJSC)

Chairman of the Management Board, OAO Gazprom

GAZPROMBANK GROUP. annual report 2010

3

Dear Shareholders, Customers and Partners of the Bank,

I can note with satisfaction that

the past year has been successful for

GPB (OJSC). The Bank has achieved bal-

ance-sheet figures that are significantly

better than target. The structure of as-

sets and liabilities has improved, and

there is a sufficient capital reserve. The

growth rates of main operations, as in

the previous year, were higher than av-

erage Russian banking indices. Thanks

to this exceptional growth, the Bank has

increased its share in a number of key

business segments and strengthened its

market position. According to Gazprom-

bank’s performance in 2010, it ranks No.

3 in the country in terms of capital, as-

sets, loans extended to the non-financial

sector and raised customer funds.

The Bank’s loan portfolio exceeded

RUR 1 trillion as of the beginning of 2011.

More than 90% of the portfolio was com-

prised of loans extended to corporate

customers. GPB (OJSC) is in fact the only

non-government bank in the country that

is capable of providing effective loan sup-

port to leading companies on a national

scale. The share of the largest enterprises

among the Bank’s corporate borrowers

was 96% as of January 1, 2011. From an

industry perspective, these include enter-

prises in the metallurgical, gas, oil, coal,

electric power and machine-building in-

dustries. In addition the portfolio of loans

provided to agro-industrial holdings, trad-

ing and transportation companies grew

at a rapid rate in 2010.

A concentration on corporate cus-

tomers does not prevent, but, indeed,

significantly facilitates expansion of

the Bank’s retail business since its main

target segment is represented by the

officers of corporate customers and

their families. During the reporting year,

more than 65 thousand new individual

borrowers applied to GPB (OJSC) for its

services. The viable choice of a target cus-

tomer segment and stringent risk analy-

sis and monitoring procedures have

ensured that the share of overdue loans

in the Bank’s retail loan portfolio is sig-

nificantly lower than the market average.

The volume and structure of our re-

source base have noticeably improved.

Almost two-thirds of the Bank’s total li-

abilities comprised funds raised from

corporate customers with an increased

proportion of mid- and long-term de-

posits. The recovery of international debt

markets created a favorable opportu-

nity in August and September 2010, to

Statement by the Chairman of the Management Board

4

offer two installments of the Bank’s Eu-

robonds for a total amount of USD 1 bil-

lion and raise a syndicated loan totaling

USD 900 million on mutually beneficial

terms. All of these capital transactions

have improved the stability and balance

of our resource base.

In attracting customers, the Bank is

consistently expanding its geographical

presence. To date, GPB (OJSC) is the core

of an international banking group. It has

43 branches, 6 subsidiary and associated

banks and about 300 bank offices across

Russia, from Kaliningrad to Kamchatka.

Two new branches, in Kazan and Surgut

were registered in 2010. Three foreign

subsidiary banks are located in Belarus,

Armenia and Switzerland. A representa-

tive office was established in India in ad-

dition to those in China and Mongolia at

the end of the last year.

The growth in volumes and territorial

coverage of the Bank’s operations is ac-

companied by the consistent expansion

of the business lines, financial instru-

ments, and products and services of-

fered. In addition to traditional banking

services, such as cash and settlement

services, deposits and lending, the in-

vestment banking line has been actively

developed. Expert, advisory and follow-

up support is provided to investment

projects, securities of customers are is-

sued and placed, trust management and

brokerage services are offered, risk hedg-

ing techniques employing derivative

financial instruments are applied, etc.

Gazprombank holds leading positions

in the Russian project and structured

finance markets, M&A market and trust

management market.

One of the special areas of the

Bank’s business is the management of

non-financial assets which last year in-

cluded more than three-hundred com-

panies operating in the petrochemical,

machine-building, media and other in-

dustries within Russia and abroad. A top

priority here is the implementation of

production capacity upgrade programs,

business development plans, strengthen-

ing the HR potential of enterprises and

supporting their employees’ social needs.

This is a matter of national importance

addressed by the Bank in a responsible

and steadfast manner in consultation

with its shareholders and close coopera-

tion with federal and local government

authorities. Some companies have al-

ready successfully implemented their

investment programs, thus enabling the

Bank to consider withdrawing from their

capital. Thus, in the reporting year, in ac-

cordance with the Board of Directors’

recommendation to reduce investments

in non-core assets, the Bank sold large

blocks of shares in CJSC SIBUR Holding

and OAO Sibneftegaz. These transac-

tions have significantly increased the

Bank’s consolidated profits and improved

the structure of its balance sheet.

The “Strategy until 2015”, approved

by the Board of Directors, aims to con-

sistently strengthen banking operations.

The Bank will continue to develop on

the principles of versatility and diver-

sification of its sectoral and product

lines. The largest companies will remain

the foundation of the customer base,

but a massive segment of mid-sized

businesses must be added to them.

GPB’s corporate loan portfolio will ex-

ceed 60% of its banking assets by 2015.

At the same time, its business structure

will be purposefully transformed to

achieve the best combination of profit-

to-risk ratios to increase the share of

regular (including commission) income

in the total revenues of the Group. The

structure of assets and capital will signifi-

cantly improve.

Another strategic objective for the

Bank is the improvement of its corporate

governance system. It is not needed just to

improve ratings and ensure growth in mar-

ket value. The unexpected crisis, atypical in

its scale of movement, has revealed a spe-

cial practical importance for such business

practices as corporate procedures, internal

controls, risk management, social responsi-

bility and business ethics. Shortcomings in

these matters have resulted in direct losses

for many companies and put their survival

in question during the recent financial

turmoil. Today, the whole world is con-

cerned with searching for new effective

systems to regulate financial and bank-

ing businesses. Gazprombank shares the

concern and is ready for new challenges.

The skill of learning lessons from our own

mistakes and those of others is a sign of

maturity. The outcomes and quality of the

Bank’s performance in the last year is elo-

quent evidence of its professionalism and

the maturity of its team.

I wish all of us success in business

and further fruitful cooperation.

Sincerely yours,

Andrey I. Akimov

Chairman of the Management Board GPB (OJSC)


5

Bank Profile

Main Events of 2010 and Positioning

● The “Strategy until 2015” has been approved by the Bank’s Board of Directors.

● The key performance indicators of Gazprombank’s business in 2010, grew at rates that exceeded banking system

averages:

corporate loans — by 37%;

amounts owed to companies — by 33%;

net profit — by 13%.

● According to results from 2009, Gazprombank has allocated 36% of its net profit for dividends, calculated under RAS.

● In financial markets, Gazprombank:

placed a USD 1 billion issue of 6.25% Eurobonds maturing in December 2014;

raised a syndicated loan for a total amount of USD 900 million repayable in 3 years;

redeemed the first CHF 500 million issue of Eurobonds denominated in Swiss francs in a timely manner;

registered and commenced the placement of 5 issues of GPB’s exchange-traded bonds for a total amount of RUR 50 billion;

maintained its leading position among the TOP-3 arrangers of customer loans in the debt market by ensuring the placement of

24 issues of bonds at MICEX with a total face value exceeding RUR 200 billion;

executed an agreement with LLC VEB Capital to arrange a RUR 30 billion issue of the Bank’s mortgage bonds within

Vnesheconombank’s investment program for the construction of affordable housing and mortgage loans from 2010 to 2012.

● Within its investment efforts, Gazprombank:

acquired shares in ZAO MK Uralmash (50%) and ZAO Vasilievsky Rudnik (62%);

sold non-banking assets, i.e. CJSC SIBUR Holding (25%) and OAO Sibneftegaz (51%);

financed facility upgrades for manufacturing drilling and machine-building equipment within its investment program designed

to develop industrial assets;

acting through CJSC Gazprombank-Asset Management, has held the second position among all management companies in

terms of net investments in mutual funds for three years;

for the second straight year maintained leadership among M&A advisors with regard to the number of completed transactions

(according to ThomsonReuters).

BANk PROFILE

6

● A 25% + 1 share in OAO AKB Eurofinance Mosnarbank has been acquired as part of the project to set up Russian-Venezuelan

joint-venture bank.

● Gazprombank has ranked first in the rating of business partners for the Russian Federation’s higher education institutes in the

nomination “Greatest Contribution to Support Gifted Students and Young Teachers 2009” among state participation companies.

Ratings as of January 1, 2011

International rating agencies have assigned the following ratings:

● Moody’s Investors Service:

long-term national and foreign currency deposit rating and debt rating — Baa3 (stable outlook);

national scale bank deposit rating — Aaa.ru.

● Standard & Poor’s:

long-term counterparty credit rating and debt rating — BB (positive outlook);

national scale long-term credit rating — ruAA.

The main Russian rating agencies such as Moody’s Interfax, Rus-Rating, Expert RA and Information Center Rating rate Gazprom-

bank’s reliability and creditworthiness at the highest level.

As of year-end 2010, Gazprombank ranked #3 in terms of capital, assets, loans extended to the non-financial sector, and funds

raised from corporate and individual customers.

As of January 1, 2010, Gazprombank’s share in total banking industry assets was 5%, equity — 5%, funds raised from corpora-

tions — 11%, loans extended to corporate customers — 6%, retail deposits — 2%, and loans provided to individuals — 1.5%.

According to The Banker published in July 2011, the Bank, at year-end 2010, ranked:

#152 in the world in terms of capital;

#14 in the world in terms of return on capital.


7

Key Performance Indicators

Assets, RUR billion

60

65

70

75

80

85

90

95

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC



33

34

35

36

37

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1.800

2006

16.5187.2

2007

22.9250.4

2008

24.7316.7

2009

28.5389.1

2010

38.2441.5

16,522,924,728,538,2

187,2250,4316,7389,1441,5

2006

6.80

2007

16.72

2008

28.22

2009

30.19

2010

41.75

187,2250,4316,7389,1441,5

2006

0.81 0.39

2007

2.281.42

2008

3.151.88

2009

3.811.94

2010

4.212.45

0.04 0.33 0.81 0.91 1.23

2009 2010

2006

44.036.3

2007

44.157.8

2008

39.242.7

2009

5.021.2

2010

14.92.4

4444,139,2

514,9

36,357,842,721,22,4

2006

51.96.3

2007

60.58.0

2008

67.99.2

2009

75.911.9

2010

75.210.5

2006

833.9

2007

948.5

2008

1,852.2

2009

1,741.1

2010

1,951.6

51,960,567,975,9

76

6,38

9,211,910,6

2006

175.1

2007

201.6

2008

127.9

2009

196.0

2010

221.9

175,1 201,6 127,9 196,0 221,9

2006 2007 2008 2009 2010

273.1 346.2 557.3 723.3 988.2

2006 2007 2008 2009 2010

44.3 68.5 96.6 81.3 95.8

2006 2007 2008 2009 2010

225.5 284.6 510.0 710.2 947.0

2006 2007 2008 2009 2010

75.9 106.7 132.6 170.6 238.4

2006 2007 2008 2009 2010

26.9 22.1 9.2 14.8 16.8

2006 2007 2008 2009 2010

21.7 19.9 7.8 9.6 10.6

2006 2007 2008 2009 2010

0.4 0.9 1.5 3.9 2.1

2006 2007 2008 2009 2010

3.9 3.3 3.6 6.9 4.7

2006 2007 2008 2009 2010

37.8 18.0 -34.4 36.4 29.6

2006 2007 2008 2009 2010

6.3 3.0 -5.5 3.1 3.7

2005

1.39.0

2006

5.410.7

2007

5.45.5

2008

37.425.6

2009

58.131.6

2010

59.225.9

2005

29.814.3

2006

82.550.5

2007

128.296.9

2008

160.6145.7

2009

186.5183.9

2010

217.1228.6

Equity (capital), RUR billion

60

65

70

75

80

85

90

95




33

34

35

36

37

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1.800

2006

16.5187.2

2007

22.9250.4

2008

24.7316.7

2009

28.5389.1

2010

38.2441.5

16,522,924,728,538,2

187,2250,4316,7389,1441,5

2006

6.80

2007

16.72

2008

28.22

2009

30.19

2010

41.75

187,2250,4316,7389,1441,5

2006

0.81 0.39

2007

2.281.42

2008

3.151.88

2009

3.811.94

2010

4.212.45

0.04 0.33 0.81 0.91 1.23

2009 2010

2006

44.036.3

2007

44.157.8

2008

39.242.7

2009

5.021.2

2010

14.92.4

4444,139,2

514,9

36,357,842,721,22,4

2006

51.96.3

2007

60.58.0

2008

67.99.2

2009

75.911.9

2010

75.210.5

2006

833.9

2007

948.5

2008

1,852.2

2009

1,741.1

2010

1,951.6

51,960,567,975,9

76

6,38

9,211,910,6

2006

175.1

2007

201.6

2008

127.9

2009

196.0

2010

221.9

175,1 201,6 127,9 196,0 221,9

2006 2007 2008 2009 2010

273.1 346.2 557.3 723.3 988.2

2006 2007 2008 2009 2010

44.3 68.5 96.6 81.3 95.8

2006 2007 2008 2009 2010

225.5 284.6 510.0 710.2 947.0

2006 2007 2008 2009 2010

75.9 106.7 132.6 170.6 238.4

2006 2007 2008 2009 2010

26.9 22.1 9.2 14.8 16.8

2006 2007 2008 2009 2010

21.7 19.9 7.8 9.6 10.6

2006 2007 2008 2009 2010

0.4 0.9 1.5 3.9 2.1

2006 2007 2008 2009 2010

3.9 3.3 3.6 6.9 4.7

2006 2007 2008 2009 2010

37.8 18.0 -34.4 36.4 29.6

2006 2007 2008 2009 2010

6.3 3.0 -5.5 3.1 3.7

2005

1.39.0

2006

5.410.7

2007

5.45.5

2008

37.425.6

2009

58.131.6

2010

59.225.9

2005

29.814.3

2006

82.550.5

2007

128.296.9

2008

160.6145.7

2009

186.5183.9

2010

217.1228.6

Loans provided to corporate customers, RUR billion

60

65

70

75

80

85

90

95




33

34

35

36

37

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1.800

2006

16.5187.2

2007

22.9250.4

2008

24.7316.7

2009

28.5389.1

2010

38.2441.5

16,522,924,728,538,2

187,2250,4316,7389,1441,5

2006

6.80

2007

16.72

2008

28.22

2009

30.19

2010

41.75

187,2250,4316,7389,1441,5

2006

0.81 0.39

2007

2.281.42

2008

3.151.88

2009

3.811.94

2010

4.212.45

0.04 0.33 0.81 0.91 1.23

2009 2010

2006

44.036.3

2007

44.157.8

2008

39.242.7

2009

5.021.2

2010

14.92.4

4444,139,2

514,9

36,357,842,721,22,4

2006

51.96.3

2007

60.58.0

2008

67.99.2

2009

75.911.9

2010

75.210.5

2006

833.9

2007

948.5

2008

1,852.2

2009

1,741.1

2010

1,951.6

51,960,567,975,9

76

6,38

9,211,910,6

2006

175.1

2007

201.6

2008

127.9

2009

196.0

2010

221.9

175,1 201,6 127,9 196,0 221,9

2006 2007 2008 2009 2010

273.1 346.2 557.3 723.3 988.2

2006 2007 2008 2009 2010

44.3 68.5 96.6 81.3 95.8

2006 2007 2008 2009 2010

225.5 284.6 510.0 710.2 947.0

2006 2007 2008 2009 2010

75.9 106.7 132.6 170.6 238.4

2006 2007 2008 2009 2010

26.9 22.1 9.2 14.8 16.8

2006 2007 2008 2009 2010

21.7 19.9 7.8 9.6 10.6

2006 2007 2008 2009 2010

0.4 0.9 1.5 3.9 2.1

2006 2007 2008 2009 2010

3.9 3.3 3.6 6.9 4.7

2006 2007 2008 2009 2010

37.8 18.0 -34.4 36.4 29.6

2006 2007 2008 2009 2010

6.3 3.0 -5.5 3.1 3.7

2005

1.39.0

2006

5.410.7

2007

5.45.5

2008

37.425.6

2009

58.131.6

2010

59.225.9

2005

29.814.3

2006

82.550.5

2007

128.296.9

2008

160.6145.7

2009

186.5183.9

2010

217.1228.6

Retail loans, RUR billion

60

65

70

75

80

85

90

95




33

34

35

36

37

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1.800

2006

16.5187.2

2007

22.9250.4

2008

24.7316.7

2009

28.5389.1

2010

38.2441.5

16,522,924,728,538,2

187,2250,4316,7389,1441,5

2006

6.80

2007

16.72

2008

28.22

2009

30.19

2010

41.75

187,2250,4316,7389,1441,5

2006

0.81 0.39

2007

2.281.42

2008

3.151.88

2009

3.811.94

2010

4.212.45

0.04 0.33 0.81 0.91 1.23

2009 2010

2006

44.036.3

2007

44.157.8

2008

39.242.7

2009

5.021.2

2010

14.92.4

4444,139,2

514,9

36,357,842,721,22,4

2006

51.96.3

2007

60.58.0

2008

67.99.2

2009

75.911.9

2010

75.210.5

2006

833.9

2007

948.5

2008

1,852.2

2009

1,741.1

2010

1,951.6

51,960,567,975,9

76

6,38

9,211,910,6

2006

175.1

2007

201.6

2008

127.9

2009

196.0

2010

221.9

175,1 201,6 127,9 196,0 221,9

2006 2007 2008 2009 2010

273.1 346.2 557.3 723.3 988.2

2006 2007 2008 2009 2010

44.3 68.5 96.6 81.3 95.8

2006 2007 2008 2009 2010

225.5 284.6 510.0 710.2 947.0

2006 2007 2008 2009 2010

75.9 106.7 132.6 170.6 238.4

2006 2007 2008 2009 2010

26.9 22.1 9.2 14.8 16.8

2006 2007 2008 2009 2010

21.7 19.9 7.8 9.6 10.6

2006 2007 2008 2009 2010

0.4 0.9 1.5 3.9 2.1

2006 2007 2008 2009 2010

3.9 3.3 3.6 6.9 4.7

2006 2007 2008 2009 2010

37.8 18.0 -34.4 36.4 29.6

2006 2007 2008 2009 2010

6.3 3.0 -5.5 3.1 3.7

2005

1.39.0

2006

5.410.7

2007

5.45.5

2008

37.425.6

2009

58.131.6

2010

59.225.9

2005

29.814.3

2006

82.550.5

2007

128.296.9

2008

160.6145.7

2009

186.5183.9

2010

217.1228.6

Amounts owed to corporate customers, RUR billion

60

65

70

75

80

85

90

95




33

34

35

36

37

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1.800

2006

16.5187.2

2007

22.9250.4

2008

24.7316.7

2009

28.5389.1

2010

38.2441.5

16,522,924,728,538,2

187,2250,4316,7389,1441,5

2006

6.80

2007

16.72

2008

28.22

2009

30.19

2010

41.75

187,2250,4316,7389,1441,5

2006

0.81 0.39

2007

2.281.42

2008

3.151.88

2009

3.811.94

2010

4.212.45

0.04 0.33 0.81 0.91 1.23

2009 2010

2006

44.036.3

2007

44.157.8

2008

39.242.7

2009

5.021.2

2010

14.92.4

4444,139,2

514,9

36,357,842,721,22,4

2006

51.96.3

2007

60.58.0

2008

67.99.2

2009

75.911.9

2010

75.210.5

2006

833.9

2007

948.5

2008

1,852.2

2009

1,741.1

2010

1,951.6

51,960,567,975,9

76

6,38

9,211,910,6

2006

175.1

2007

201.6

2008

127.9

2009

196.0

2010

221.9

175,1 201,6 127,9 196,0 221,9

2006 2007 2008 2009 2010

273.1 346.2 557.3 723.3 988.2

2006 2007 2008 2009 2010

44.3 68.5 96.6 81.3 95.8

2006 2007 2008 2009 2010

225.5 284.6 510.0 710.2 947.0

2006 2007 2008 2009 2010

75.9 106.7 132.6 170.6 238.4

2006 2007 2008 2009 2010

26.9 22.1 9.2 14.8 16.8

2006 2007 2008 2009 2010

21.7 19.9 7.8 9.6 10.6

2006 2007 2008 2009 2010

0.4 0.9 1.5 3.9 2.1

2006 2007 2008 2009 2010

3.9 3.3 3.6 6.9 4.7

2006 2007 2008 2009 2010

37.8 18.0 -34.4 36.4 29.6

2006 2007 2008 2009 2010

6.3 3.0 -5.5 3.1 3.7

2005

1.39.0

2006

5.410.7

2007

5.45.5

2008

37.425.6

2009

58.131.6

2010

59.225.9

2005

29.814.3

2006

82.550.5

2007

128.296.9

2008

160.6145.7

2009

186.5183.9

2010

217.1228.6

Amounts owed to individuals, RUR billion

60

65

70

75

80

85

90

95




33

34

35

36

37

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1.800

2006

16.5187.2

2007

22.9250.4

2008

24.7316.7

2009

28.5389.1

2010

38.2441.5

16,522,924,728,538,2

187,2250,4316,7389,1441,5

2006

6.80

2007

16.72

2008

28.22

2009

30.19

2010

41.75

187,2250,4316,7389,1441,5

2006

0.81 0.39

2007

2.281.42

2008

3.151.88

2009

3.811.94

2010

4.212.45

0.04 0.33 0.81 0.91 1.23

2009 2010

2006

44.036.3

2007

44.157.8

2008

39.242.7

2009

5.021.2

2010

14.92.4

4444,139,2

514,9

36,357,842,721,22,4

2006

51.96.3

2007

60.58.0

2008

67.99.2

2009

75.911.9

2010

75.210.5

2006

833.9

2007

948.5

2008

1,852.2

2009

1,741.1

2010

1,951.6

51,960,567,975,9

76

6,38

9,211,910,6

2006

175.1

2007

201.6

2008

127.9

2009

196.0

2010

221.9

175,1 201,6 127,9 196,0 221,9

2006 2007 2008 2009 2010

273.1 346.2 557.3 723.3 988.2

2006 2007 2008 2009 2010

44.3 68.5 96.6 81.3 95.8

2006 2007 2008 2009 2010

225.5 284.6 510.0 710.2 947.0

2006 2007 2008 2009 2010

75.9 106.7 132.6 170.6 238.4

2006 2007 2008 2009 2010

26.9 22.1 9.2 14.8 16.8

2006 2007 2008 2009 2010

21.7 19.9 7.8 9.6 10.6

2006 2007 2008 2009 2010

0.4 0.9 1.5 3.9 2.1

2006 2007 2008 2009 2010

3.9 3.3 3.6 6.9 4.7

2006 2007 2008 2009 2010

37.8 18.0 -34.4 36.4 29.6

2006 2007 2008 2009 2010

6.3 3.0 -5.5 3.1 3.7

2005

1.39.0

2006

5.410.7

2007

5.45.5

2008

37.425.6

2009

58.131.6

2010

59.225.9

2005

29.814.3

2006

82.550.5

2007

128.296.9

2008

160.6145.7

2009

186.5183.9

2010

217.1228.6

BANk PROFILE

8

Capital Adequacy (Basel I), %

60

65

70

75

80

85

90

95




33

34

35

36

37

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1.800

2006

16.5187.2

2007

22.9250.4

2008

24.7316.7

2009

28.5389.1

2010

38.2441.5

16,522,924,728,538,2

187,2250,4316,7389,1441,5

2006

6.80

2007

16.72

2008

28.22

2009

30.19

2010

41.75

187,2250,4316,7389,1441,5

2006

0.81 0.39

2007

2.281.42

2008

3.151.88

2009

3.811.94

2010

4.212.45

0.04 0.33 0.81 0.91 1.23

2009 2010

2006

44.036.3

2007

44.157.8

2008

39.242.7

2009

5.021.2

2010

14.92.4

4444,139,2

514,9

36,357,842,721,22,4

2006

51.96.3

2007

60.58.0

2008

67.99.2

2009

75.911.9

2010

75.210.5

2006

833.9

2007

948.5

2008

1,852.2

2009

1,741.1

2010

1,951.6

51,960,567,975,9

76

6,38

9,211,910,6

2006

175.1

2007

201.6

2008

127.9

2009

196.0

2010

221.9

175,1 201,6 127,9 196,0 221,9

2006 2007 2008 2009 2010

273.1 346.2 557.3 723.3 988.2

2006 2007 2008 2009 2010

44.3 68.5 96.6 81.3 95.8

2006 2007 2008 2009 2010

225.5 284.6 510.0 710.2 947.0

2006 2007 2008 2009 2010

75.9 106.7 132.6 170.6 238.4

2006 2007 2008 2009 2010

26.9 22.1 9.2 14.8 16.8

2006 2007 2008 2009 2010

21.7 19.9 7.8 9.6 10.6

2006 2007 2008 2009 2010

0.4 0.9 1.5 3.9 2.1

2006 2007 2008 2009 2010

3.9 3.3 3.6 6.9 4.7

2006 2007 2008 2009 2010

37.8 18.0 -34.4 36.4 29.6

2006 2007 2008 2009 2010

6.3 3.0 -5.5 3.1 3.7

2005

1.39.0

2006

5.410.7

2007

5.45.5

2008

37.425.6

2009

58.131.6

2010

59.225.9

2005

29.814.3

2006

82.550.5

2007

128.296.9

2008

160.6145.7

2009

186.5183.9

2010

217.1228.6

Tier 1 capital adequacy, %

60

65

70

75

80

85

90

95




33

34

35

36

37

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1.800

2006

16.5187.2

2007

22.9250.4

2008

24.7316.7

2009

28.5389.1

2010

38.2441.5

16,522,924,728,538,2

187,2250,4316,7389,1441,5

2006

6.80

2007

16.72

2008

28.22

2009

30.19

2010

41.75

187,2250,4316,7389,1441,5

2006

0.81 0.39

2007

2.281.42

2008

3.151.88

2009

3.811.94

2010

4.212.45

0.04 0.33 0.81 0.91 1.23

2009 2010

2006

44.036.3

2007

44.157.8

2008

39.242.7

2009

5.021.2

2010

14.92.4

4444,139,2

514,9

36,357,842,721,22,4

2006

51.96.3

2007

60.58.0

2008

67.99.2

2009

75.911.9

2010

75.210.5

2006

833.9

2007

948.5

2008

1,852.2

2009

1,741.1

2010

1,951.6

51,960,567,975,9

76

6,38

9,211,910,6

2006

175.1

2007

201.6

2008

127.9

2009

196.0

2010

221.9

175,1 201,6 127,9 196,0 221,9

2006 2007 2008 2009 2010

273.1 346.2 557.3 723.3 988.2

2006 2007 2008 2009 2010

44.3 68.5 96.6 81.3 95.8

2006 2007 2008 2009 2010

225.5 284.6 510.0 710.2 947.0

2006 2007 2008 2009 2010

75.9 106.7 132.6 170.6 238.4

2006 2007 2008 2009 2010

26.9 22.1 9.2 14.8 16.8

2006 2007 2008 2009 2010

21.7 19.9 7.8 9.6 10.6

2006 2007 2008 2009 2010

0.4 0.9 1.5 3.9 2.1

2006 2007 2008 2009 2010

3.9 3.3 3.6 6.9 4.7

2006 2007 2008 2009 2010

37.8 18.0 -34.4 36.4 29.6

2006 2007 2008 2009 2010

6.3 3.0 -5.5 3.1 3.7

2005

1.39.0

2006

5.410.7

2007

5.45.5

2008

37.425.6

2009

58.131.6

2010

59.225.9

2005

29.814.3

2006

82.550.5

2007

128.296.9

2008

160.6145.7

2009

186.5183.9

2010

217.1228.6

Ratio of non-performing loans, %

60

65

70

75

80

85

90

95




33

34

35

36

37

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1.800

2006

16.5187.2

2007

22.9250.4

2008

24.7316.7

2009

28.5389.1

2010

38.2441.5

16,522,924,728,538,2

187,2250,4316,7389,1441,5

2006

6.80

2007

16.72

2008

28.22

2009

30.19

2010

41.75

187,2250,4316,7389,1441,5

2006

0.81 0.39

2007

2.281.42

2008

3.151.88

2009

3.811.94

2010

4.212.45

0.04 0.33 0.81 0.91 1.23

2009 2010

2006

44.036.3

2007

44.157.8

2008

39.242.7

2009

5.021.2

2010

14.92.4

4444,139,2

514,9

36,357,842,721,22,4

2006

51.96.3

2007

60.58.0

2008

67.99.2

2009

75.911.9

2010

75.210.5

2006

833.9

2007

948.5

2008

1,852.2

2009

1,741.1

2010

1,951.6

51,960,567,975,9

76

6,38

9,211,910,6

2006

175.1

2007

201.6

2008

127.9

2009

196.0

2010

221.9

175,1 201,6 127,9 196,0 221,9

2006 2007 2008 2009 2010

273.1 346.2 557.3 723.3 988.2

2006 2007 2008 2009 2010

44.3 68.5 96.6 81.3 95.8

2006 2007 2008 2009 2010

225.5 284.6 510.0 710.2 947.0

2006 2007 2008 2009 2010

75.9 106.7 132.6 170.6 238.4

2006 2007 2008 2009 2010

26.9 22.1 9.2 14.8 16.8

2006 2007 2008 2009 2010

21.7 19.9 7.8 9.6 10.6

2006 2007 2008 2009 2010

0.4 0.9 1.5 3.9 2.1

2006 2007 2008 2009 2010

3.9 3.3 3.6 6.9 4.7

2006 2007 2008 2009 2010

37.8 18.0 -34.4 36.4 29.6

2006 2007 2008 2009 2010

6.3 3.0 -5.5 3.1 3.7

2005

1.39.0

2006

5.410.7

2007

5.45.5

2008

37.425.6

2009

58.131.6

2010

59.225.9

2005

29.814.3

2006

82.550.5

2007

128.296.9

2008

160.6145.7

2009

186.5183.9

2010

217.1228.6

Ratio of loan loss provisions to loan portfolio, %

60

65

70

75

80

85

90

95




33

34

35

36

37

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1.800

2006

16.5187.2

2007

22.9250.4

2008

24.7316.7

2009

28.5389.1

2010

38.2441.5

16,522,924,728,538,2

187,2250,4316,7389,1441,5

2006

6.80

2007

16.72

2008

28.22

2009

30.19

2010

41.75

187,2250,4316,7389,1441,5

2006

0.81 0.39

2007

2.281.42

2008

3.151.88

2009

3.811.94

2010

4.212.45

0.04 0.33 0.81 0.91 1.23

2009 2010

2006

44.036.3

2007

44.157.8

2008

39.242.7

2009

5.021.2

2010

14.92.4

4444,139,2

514,9

36,357,842,721,22,4

2006

51.96.3

2007

60.58.0

2008

67.99.2

2009

75.911.9

2010

75.210.5

2006

833.9

2007

948.5

2008

1,852.2

2009

1,741.1

2010

1,951.6

51,960,567,975,9

76

6,38

9,211,910,6

2006

175.1

2007

201.6

2008

127.9

2009

196.0

2010

221.9

175,1 201,6 127,9 196,0 221,9

2006 2007 2008 2009 2010

273.1 346.2 557.3 723.3 988.2

2006 2007 2008 2009 2010

44.3 68.5 96.6 81.3 95.8

2006 2007 2008 2009 2010

225.5 284.6 510.0 710.2 947.0

2006 2007 2008 2009 2010

75.9 106.7 132.6 170.6 238.4

2006 2007 2008 2009 2010

26.9 22.1 9.2 14.8 16.8

2006 2007 2008 2009 2010

21.7 19.9 7.8 9.6 10.6

2006 2007 2008 2009 2010

0.4 0.9 1.5 3.9 2.1

2006 2007 2008 2009 2010

3.9 3.3 3.6 6.9 4.7

2006 2007 2008 2009 2010

37.8 18.0 -34.4 36.4 29.6

2006 2007 2008 2009 2010

6.3 3.0 -5.5 3.1 3.7

2005

1.39.0

2006

5.410.7

2007

5.45.5

2008

37.425.6

2009

58.131.6

2010

59.225.9

2005

29.814.3

2006

82.550.5

2007

128.296.9

2008

160.6145.7

2009

186.5183.9

2010

217.1228.6

ROAA, %

60

65

70

75

80

85

90

95




33

34

35

36

37

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1.800

2006

16.5187.2

2007

22.9250.4

2008

24.7316.7

2009

28.5389.1

2010

38.2441.5

16,522,924,728,538,2

187,2250,4316,7389,1441,5

2006

6.80

2007

16.72

2008

28.22

2009

30.19

2010

41.75

187,2250,4316,7389,1441,5

2006

0.81 0.39

2007

2.281.42

2008

3.151.88

2009

3.811.94

2010

4.212.45

0.04 0.33 0.81 0.91 1.23

2009 2010

2006

44.036.3

2007

44.157.8

2008

39.242.7

2009

5.021.2

2010

14.92.4

4444,139,2

514,9

36,357,842,721,22,4

2006

51.96.3

2007

60.58.0

2008

67.99.2

2009

75.911.9

2010

75.210.5

2006

833.9

2007

948.5

2008

1,852.2

2009

1,741.1

2010

1,951.6

51,960,567,975,9

76

6,38

9,211,910,6

2006

175.1

2007

201.6

2008

127.9

2009

196.0

2010

221.9

175,1 201,6 127,9 196,0 221,9

2006 2007 2008 2009 2010

273.1 346.2 557.3 723.3 988.2

2006 2007 2008 2009 2010

44.3 68.5 96.6 81.3 95.8

2006 2007 2008 2009 2010

225.5 284.6 510.0 710.2 947.0

2006 2007 2008 2009 2010

75.9 106.7 132.6 170.6 238.4

2006 2007 2008 2009 2010

26.9 22.1 9.2 14.8 16.8

2006 2007 2008 2009 2010

21.7 19.9 7.8 9.6 10.6

2006 2007 2008 2009 2010

0.4 0.9 1.5 3.9 2.1

2006 2007 2008 2009 2010

3.9 3.3 3.6 6.9 4.7

2006 2007 2008 2009 2010

37.8 18.0 -34.4 36.4 29.6

2006 2007 2008 2009 2010

6.3 3.0 -5.5 3.1 3.7

2005

1.39.0

2006

5.410.7

2007

5.45.5

2008

37.425.6

2009

58.131.6

2010

59.225.9

2005

29.814.3

2006

82.550.5

2007

128.296.9

2008

160.6145.7

2009

186.5183.9

2010

217.1228.6

ROAE, %

60

65

70

75

80

85

90

95




33

34

35

36

37

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1.800

2006

16.5187.2

2007

22.9250.4

2008

24.7316.7

2009

28.5389.1

2010

38.2441.5

16,522,924,728,538,2

187,2250,4316,7389,1441,5

2006

6.80

2007

16.72

2008

28.22

2009

30.19

2010

41.75

187,2250,4316,7389,1441,5

2006

0.81 0.39

2007

2.281.42

2008

3.151.88

2009

3.811.94

2010

4.212.45

0.04 0.33 0.81 0.91 1.23

2009 2010

2006

44.036.3

2007

44.157.8

2008

39.242.7

2009

5.021.2

2010

14.92.4

4444,139,2

514,9

36,357,842,721,22,4

2006

51.96.3

2007

60.58.0

2008

67.99.2

2009

75.911.9

2010

75.210.5

2006

833.9

2007

948.5

2008

1,852.2

2009

1,741.1

2010

1,951.6

51,960,567,975,9

76

6,38

9,211,910,6

2006

175.1

2007

201.6

2008

127.9

2009

196.0

2010

221.9

175,1 201,6 127,9 196,0 221,9

2006 2007 2008 2009 2010

273.1 346.2 557.3 723.3 988.2

2006 2007 2008 2009 2010

44.3 68.5 96.6 81.3 95.8

2006 2007 2008 2009 2010

225.5 284.6 510.0 710.2 947.0

2006 2007 2008 2009 2010

75.9 106.7 132.6 170.6 238.4

2006 2007 2008 2009 2010

26.9 22.1 9.2 14.8 16.8

2006 2007 2008 2009 2010

21.7 19.9 7.8 9.6 10.6

2006 2007 2008 2009 2010

0.4 0.9 1.5 3.9 2.1

2006 2007 2008 2009 2010

3.9 3.3 3.6 6.9 4.7

2006 2007 2008 2009 2010

37.8 18.0 -34.4 36.4 29.6

2006 2007 2008 2009 2010

6.3 3.0 -5.5 3.1 3.7

2005

1.39.0

2006

5.410.7

2007

5.45.5

2008

37.425.6

2009

58.131.6

2010

59.225.9

2005

29.814.3

2006

82.550.5

2007

128.296.9

2008

160.6145.7

2009

186.5183.9

2010

217.1228.6


9

Arzamas

Rostoshi

Novokuibyshevsk

Salavat

Magnitogorsk

Podgorodnyaya Prokrovka

Sterlitamak

Nizhny Tagil

Lesnoy

Pervouralsk

Neftekamsk

Novotroitsk

Schelkovo

Yaroslavl

Novomoskovsk

Sosnovy Bor

Sovetsk

Kurchatov

Yelets

Aleksin

Kaluga

Klintsy

Smolensk

Starodub

KirovKorotchayevo

Salekhard

Pravookhettinsky

IvdelPelym

PriozernyKhalimsunt

Nyagan

Labytnangi

Pripolyarny

IgrimVerkhnekazymsky

Vuktyl

Usinsk

SindorSyktyvkar

Nizhnyaya Tura

Shadrinsk

Krasnoturyinsk

Urengoy

Tarko-Sale

Ноябрьск

Seversk

Kargasok

Biysk

Zheleznogorsk

Zelenogorsk

Angarsk

Komsomolsk-on-Amur

Petropavlovsk-Kamchatsky

Achinsk

Novokuznetsk

Aleksandrovskoye

ParabelIshim

Tobolsk

Nizhnevartovsk

Strezhevoy

Nefteyugansk

Gubkinsky

Kolpashevo

Khanty-Mansiysk

Unyugan

Lykhma

BeloyarskyPeregrebnoye

PriobyeSvetly

Andra Sorum

Yamburg

ZapolyarnyYagelnyLong-Yugan

Надым Pangody

NovorossiyskTemryuk

Taganrog

Novocherkassk

Armavir

Nevinnomyssk

Khasavyurt

Derbent

Sochi IzobilnyRyzdvyany

PyatigorskKrasny Yar

Aksaraisky

Tuapse

VotkinskMozhga

TolyattiChaikovsky

MoscowBryansk

Belgorod

Tula

Lipetsk

Kostroma

Nizhny Novgorod

Samara

SaratovIzhevsk Perm

Yugorsk

ChelyabinskOrenburg

Yekaterinburg

Tyumen

Omsk

Novosibirsk

Barnaul

Kemerovo

Tomsk

Krasnoyarsk

Irkutsk

Yakutsk

Khabarovsk

Beijing

Zürich

New-Delhi

Yuzhno-Sakhalinsk

Vladivostok

Ukhta

Ufa

Saint Petersburg

Murmansk

Kaliningrad

Kazan

Yoshkar-OlaCheboksary

Krasnodar

Stavropol

Rostov-on-Don

Volgograd

Astrakhan

Makhachkala

Novy Urengoy

Surgut

Vologda

TotmaYubileiny

Arkhangelsk

Plesetsk

VorkutaNyuksenitsa

Sokol

Sheksna VozhegaKuloy

Kotlas Koryazhma

VychegodskyUrdoma

Sosnogorsk

Муравленко

MikunPechora

Severodvinsk

NyandomaKonoshaCherepovets

Ustyuzhna

Borovichi

Staraya Russa

Babayevo

Veliky Novgorod

Vytegra

Kaduy

Tarnogsky gorodok

GryazovetsUglichMyshkin

RostovPogorelovo

Ivanovo Kineshma

PrivodinoVeliky Ustyug

Maloshuika

Geographic coverage

Regional network of Gazprombank Group as of the end 2010:

– 7 subsidiary banks (ZAO AKB Sibirgazbank, OAO KB Severgazbank,

OAO Credit Ural Bank, AB GPB-Ipoteka (OAO), OOO CB Noyabrsknefte-

kombinat, ZAO AREXIMBANK–GAZPROMBANK GROUP, Gazprombank

(Switzerland) Ltd., and 2 associated banks (OAO Belgazprombank and

OAO AKB Eurofinance Mosnarbank);

– 3 representative offices: in Beijing (China), Ulan-Bator (Mongolia)

and New Delhi (India);

– more than 580 bank offices;

– more than 3,000 ATMs, 2.1 thousand cash advance offices and 15.3 thou-

sand POS-terminals.

BANk PROFILE

10

Arzamas

Rostoshi

Novokuibyshevsk

Salavat

Magnitogorsk

Podgorodnyaya Prokrovka

Sterlitamak

Nizhny Tagil

Lesnoy

Pervouralsk

Neftekamsk

Novotroitsk

Schelkovo

Yaroslavl

Novomoskovsk

Sosnovy Bor

Sovetsk

Kurchatov

Yelets

Aleksin

Kaluga

Klintsy

Smolensk

Starodub

KirovKorotchayevo

Salekhard

Pravookhettinsky

IvdelPelym

PriozernyKhalimsunt

Nyagan

Labytnangi

Pripolyarny

IgrimVerkhnekazymsky

Vuktyl

Usinsk

SindorSyktyvkar

Nizhnyaya Tura

Shadrinsk

Krasnoturyinsk

Urengoy

Tarko-Sale

Ноябрьск

Seversk

Kargasok

Biysk

Zheleznogorsk

Zelenogorsk

Angarsk

Komsomolsk-on-Amur

Petropavlovsk-Kamchatsky

Achinsk

Novokuznetsk

Aleksandrovskoye

ParabelIshim

Tobolsk

Nizhnevartovsk

Strezhevoy

Nefteyugansk

Gubkinsky

Kolpashevo

Khanty-Mansiysk

Unyugan

Lykhma

BeloyarskyPeregrebnoye

PriobyeSvetly

Andra Sorum

Yamburg

ZapolyarnyYagelnyLong-Yugan

Надым Pangody

NovorossiyskTemryuk

Taganrog

Novocherkassk

Armavir

Nevinnomyssk

Khasavyurt

Derbent

Sochi IzobilnyRyzdvyany

PyatigorskKrasny Yar

Aksaraisky

Tuapse

VotkinskMozhga

TolyattiChaikovsky

MoscowBryansk

Belgorod

Tula

Lipetsk

Kostroma

Nizhny Novgorod

Samara

SaratovIzhevsk Perm

Yugorsk

ChelyabinskOrenburg

Yekaterinburg

Tyumen

Omsk

Novosibirsk

Barnaul

Kemerovo

Tomsk

Krasnoyarsk

Irkutsk

Yakutsk

Khabarovsk

Beijing

Zürich

New-Delhi

Yuzhno-Sakhalinsk

Vladivostok

Ukhta

Ufa

Saint Petersburg

Murmansk

Kaliningrad

Kazan

Yoshkar-OlaCheboksary

Krasnodar

Stavropol

Rostov-on-Don

Volgograd

Astrakhan

Makhachkala

Novy Urengoy

Surgut

Vologda

TotmaYubileiny

Arkhangelsk

Plesetsk

VorkutaNyuksenitsa

Sokol

Sheksna VozhegaKuloy

Kotlas Koryazhma

VychegodskyUrdoma

Sosnogorsk

Муравленко

MikunPechora

Severodvinsk

NyandomaKonoshaCherepovets

Ustyuzhna

Borovichi

Staraya Russa

Babayevo

Veliky Novgorod

Vytegra

Kaduy

Tarnogsky gorodok

GryazovetsUglichMyshkin

RostovPogorelovo

Ivanovo Kineshma

PrivodinoVeliky Ustyug

Maloshuika

GPB branches

GPB supplementary, operational and lending and cash services offices

GPB subsidiary and associated banks

Representative offices abroad

Regional presence of GPB (OJSC)


11

Shareholders

Equity stake

As of January 01, 2010 As of January 01, 2011

ZAO Leader, (on behalf of Non-State Pension Fund GAZFOND) 42.89% 42.89%

OAO Gazprom 41.73% 41.73%

Non-State Pension Fund GAZFOND 7.11% 7.11%

Treasury stock 5.82% 6.58%

Individuals 2.45% 1.69%

BANk PROFILE

12

Board of Directors

Chairman of the Board of Directors

Alexey B. Miller Chairman of OAO Gazprom Management Board

Deputy Chairmen of the Board of Directors

Andrey I. Akimov Chairman of the Management Board of Gazprombank (Open Joint-stock Company)

Mikhail L. Sereda Deputy Chairman of OAO Gazprom Management Board, Chief Administration Officer of OAO Gazprom

Yury N. Shamalov President of Non-State Pension Fund GAZFOND

Members of the Board of Directors

Yelena A. Vasilyeva Deputy Chairperson of OAO Gazprom Management Board, Chief Accountant of OAO Gazprom

Anatoly A. Gavrilenko Chief Executive Officer of ZAO Leader, Trust Management

Ilya V. Eliseev Deputy Chairman of the Management Board of Gazprombank (Open Joint-stock Company)

Dmitry V. Konov President of OOO Sibur

Alexander V. Krasnenkov Chief Executive Officer of Baltic LNG Company

Andrey V. Kruglov Deputy Chairman of OAO Gazprom Management Board, Head of OAO Gazprom Financial and Economic Department

Kirill G. Seleznev Member of OAO Gazprom Management Board, Head of the Gas & Liquid Hydrocarbons Processing and Marketing Department

Nikolay Y. Senkevich Chief Executive Officer of OAO Gazprom-Media


13

Management Board

Chairman of the Management Board

Andrey I. Akimov

Deputy Chairmen of the Management Board

Ilya V. Eliseev

Sergey S. Ivanov (until April 04, 2011)

Farid M. Kantserov

Viktor A. Komanov

Nikolay G. Korenev

Viktor B. Korytov

Svetlana E. Malyuseva Bank’s Chief Accountant

Alexey A. Matveev

Alexander Y. Muranov

Alexey A. Obozintsev

Famil K. Sadygov

Alexander I. Sobol

Members of the Management Board

Oleg M. Vaksman First Vice-President

Valery A. Seregin First Vice-President

Natalia A. Chervonenko First Vice-President

Alexander O. Shmidt First Vice-President

BANk PROFILE

14

Performance Results and Development Prospects

Russian Economy in 2010

The recovery of the Russian econo-

my in 2010 was facilitated by the gener-

ally improved global economic situation,

growth in prices for exported Russian

raw materials due to increased external

demand, recovery of stock markets and

strengthening of balance of payments.

A certain positive effect was also exerted

by the anti-crisis measures of the gov-

ernment which gave rise to the recovery

of internal demand, both consumer and

investment. GDP growth during the year

was 4% despite a pause in the economic

recovery due to a drop in agricultural

production expected in the 3rd quarter.

At the same time, growth in the Russian

economy proved to be below growth

rates of the global economy that were

above 5% in 2010.

One of the most noticeable trends

of the previous year was the accelerated

growth in consumer prices which ex-

ceeded all forecasts. While during the first

six months of 2010, the moderate growth

Urals oil price, USD/barrel

60

65

70

75

80

85

90

95




33

34

35

36

37

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1.800

2006

16.5187.2

2007

22.9250.4

2008

24.7316.7

2009

28.5389.1

2010

38.2441.5

16,522,924,728,538,2

187,2250,4316,7389,1441,5

2006

6.80

2007

16.72

2008

28.22

2009

30.19

2010

41.75

187,2250,4316,7389,1441,5

2006

0.81 0.39

2007

2.281.42

2008

3.151.88

2009

3.811.94

2010

4.212.45

0.04 0.33 0.81 0.91 1.23

2009 2010

2006

44.036.3

2007

44.157.8

2008

39.242.7

2009

5.021.2

2010

14.92.4

4444,139,2

514,9

36,357,842,721,22,4

2006

51.96.3

2007

60.58.0

2008

67.99.2

2009

75.911.9

2010

75.210.5

2006

833.9

2007

948.5

2008

1,852.2

2009

1,741.1

2010

1,951.6

51,960,567,975,9

76

6,38

9,211,910,6

2006

175.1

2007

201.6

2008

127.9

2009

196.0

2010

221.9

175,1 201,6 127,9 196,0 221,9

2006 2007 2008 2009 2010

273.1 346.2 557.3 723.3 988.2

2006 2007 2008 2009 2010

44.3 68.5 96.6 81.3 95.8

2006 2007 2008 2009 2010

225.5 284.6 510.0 710.2 947.0

2006 2007 2008 2009 2010

75.9 106.7 132.6 170.6 238.4

2006 2007 2008 2009 2010

26.9 22.1 9.2 14.8 16.8

2006 2007 2008 2009 2010

21.7 19.9 7.8 9.6 10.6

2006 2007 2008 2009 2010

0.4 0.9 1.5 3.9 2.1

2006 2007 2008 2009 2010

3.9 3.3 3.6 6.9 4.7

2006 2007 2008 2009 2010

37.8 18.0 -34.4 36.4 29.6

2006 2007 2008 2009 2010

6.3 3.0 -5.5 3.1 3.7

2005

1.39.0

2006

5.410.7

2007

5.45.5

2008

37.425.6

2009

58.131.6

2010

59.225.9

2005

29.814.3

2006

82.550.5

2007

128.296.9

2008

160.6145.7

2009

186.5183.9

2010

217.1228.6


15

in prices was restrained by limited con-

sumer demand, a sequential acceleration

of inflation commenced starting in Au-

gust due to increasing global and domes-

tic prices for grain and food; in December

2010, prices increased by 1.1% compared

to 0.8% in November. At year-end 2010,

headline inflation was 8.8%, the same as

the previous year. Moreover, by the start

of 2011, the economy had accumulated

significant inflation risks that resulted in

the growth of prices in other consumer

market sectors.

Industrial output increased by 8.2%

in 2010, with manufacturing making the

greatest contribution with an 11.8% in-

crease. The growth of manufacturing

and other economic output has been

significantly influenced by the growth

in investment demand. Fixed capital

expenditures increased by 6.0% during

2010; at the same time, the greatest ac-

celeration of investment growth was in

the 4th quarter and totaled 7.7%.

During the crisis, from 2009 until

mid-2010, agriculture preserved stability

and positive trends best of all. However,

due to abnormally hot weather during

the summer last year, agricultural output

significantly decreased, impacting the

overall trend. Annual aggregate output

decreased by 11.9%.

Real disposable income grew by

4.3% during 2010, with real salaries in-

creasing by 4.2%. As for the labor mar-

ket, the number of unemployed per-

sons decreased by 0.7 million during

2010, averaging 5.6 million across the

year, or 7.5% of the economically ac-

tive population (0.9 p.p. lower than the

2009 average).

At year-end, retail turnover increased

by 4.4% compared to 2009. Gradual

growth in monthly retail turnover was

observed during the first half of 2010.

After a drop in August and September

2010, the growth trend resumed. Paid

services increased by 1.4% during 2010.

In the last year, in connection with

a more favorable commodity market

environment, Russian exports increased

by 31.2% compared to 2009, and totaled

USD 398.0 billion with physical volumes

increasing by 11.9%.

Imports also increased significantly

compared to 2009 (by 29.7%), and to-

taled USD 248.8 billion. The increase

in imports was associated with a suc-

cessive restoration of physical imports

(by 28.1%), while prices for imported

goods remained nearly unchanged. The

growth in imports was observed with

respect to all types of products. The

import of investment goods increased

most noticeably.

The trade balance was positive in

2010 at USD 149.2 billion, USD 37.6 bil-

lion higher than in 2009.

The net outflow of capital from the

private sector was USD 38.3 billion in

2010, and sharply accelerated by the

end of the year. To a large extent this was

due to a decreased interest in Russian

assets on the part of foreign investors.

In late 2010, the acceleration of capital

outflows was also related to growth in

foreign assets in the banking sector.

By year-end 2010, the Ruble/Dollar

exchange rate decreased slightly (by

0.9) while the Ruble/Euro exchange

rate increased significantly (by 6.3%), the

Dual Currency Basket of the Russian Central Bank, RUR/basket unit

60

65

70

75

80

85

90

95




33

34

35

36

37

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1.800

2006

16.5187.2

2007

22.9250.4

2008

24.7316.7

2009

28.5389.1

2010

38.2441.5

16,522,924,728,538,2

187,2250,4316,7389,1441,5

2006

6.80

2007

16.72

2008

28.22

2009

30.19

2010

41.75

187,2250,4316,7389,1441,5

2006

0.81 0.39

2007

2.281.42

2008

3.151.88

2009

3.811.94

2010

4.212.45

0.04 0.33 0.81 0.91 1.23

2009 2010

2006

44.036.3

2007

44.157.8

2008

39.242.7

2009

5.021.2

2010

14.92.4

4444,139,2

514,9

36,357,842,721,22,4

2006

51.96.3

2007

60.58.0

2008

67.99.2

2009

75.911.9

2010

75.210.5

2006

833.9

2007

948.5

2008

1,852.2

2009

1,741.1

2010

1,951.6

51,960,567,975,9

76

6,38

9,211,910,6

2006

175.1

2007

201.6

2008

127.9

2009

196.0

2010

221.9

175,1 201,6 127,9 196,0 221,9

2006 2007 2008 2009 2010

273.1 346.2 557.3 723.3 988.2

2006 2007 2008 2009 2010

44.3 68.5 96.6 81.3 95.8

2006 2007 2008 2009 2010

225.5 284.6 510.0 710.2 947.0

2006 2007 2008 2009 2010

75.9 106.7 132.6 170.6 238.4

2006 2007 2008 2009 2010

26.9 22.1 9.2 14.8 16.8

2006 2007 2008 2009 2010

21.7 19.9 7.8 9.6 10.6

2006 2007 2008 2009 2010

0.4 0.9 1.5 3.9 2.1

2006 2007 2008 2009 2010

3.9 3.3 3.6 6.9 4.7

2006 2007 2008 2009 2010

37.8 18.0 -34.4 36.4 29.6

2006 2007 2008 2009 2010

6.3 3.0 -5.5 3.1 3.7

2005

1.39.0

2006

5.410.7

2007

5.45.5

2008

37.425.6

2009

58.131.6

2010

59.225.9

2005

29.814.3

2006

82.550.5

2007

128.296.9

2008

160.6145.7

2009

186.5183.9

2010

217.1228.6

PERFORMANCE RESULTS AND DEvELOPMENT PROSPECTS RUSSIAN ECONOMY IN 2010

16

first time in the last three years the Ru-

ble exchange rate strengthened against

the dual currency basket. The value of

the Dual Currency Basket decreased by

RUR 1.07, or slightly less than 3% during

the year.

The Bank of Russia’s currency re-

serves increased by USD 36.8 billion dur-

ing 2010, due to balance of payments

transactions. At the same time, the

growth in reserves took place primarily

during the first half of the year and de-

creased USD 8.6 billion by the end of the

year due to capital outflow.

Trends in the Russian stock mar-

ket during 2010 were not homogene-

ous and had three well defined move-

ments: an active growth during the first

months of the year when the market

managed to reach July 2008 levels; a de-

cline from April to June; and a resump-

tion of growth during the second half of

the year which resulted in new annual

maximums. As to growth rates, the na-

tional stock market holds a mid position

in the list of emerging economies. By

year-end, the RTSI increased by 22.7%,

to 1,772.53, while the MICEX index in-

creased by 23.2%, to 1,687.99. The abso-

lute leaders during the year were share

indexes of the companies focused pri-

marily on the domestic market — con-

sumer products and services (+85.2%)

and machine-building (+73.9%). At the

same time, companies operating in

the oil & gas industry, whose index in-

creased by only 17.6%, were manifest

outsiders. Given the fact that the stock

of the companies operating in that sec-

tor has a large share in the total capitali-

zation of consolidated indexes, the total

growth in the MICEX and RTSI appears

to be relatively skewed.

Apart from factors tied closely to the

global financial and economic crisis, the

Russian financial market in 2010 was

affected, on the one hand, by stabilized

prices for energy carriers at a level com-

fortable for the Russian companies and

state budget and, on the other hand,

by a limited growth in investments by

Russian companies. A surge of capital

outflow in the 3rd and 4th quarters had

a significant impact on the currency

market. The high level of Ruble liquidity

associated with the inflow of proceeds

from export operations and the soft

monetary policy pursued by the Central

Bank of the Russian Federation resulted

in decreasing interest rates both for

loans and in the public debt market. At

the same time, the tightening of mon-

etary policy due to noticeable growth in

inflation entailed a correction in the mar-

ket for Ruble-denominated bonds dur-

ing the 4th quarter. The European debt

crisis, however, had almost no effect on

the Ruble debt market. Its limited effect

was a lower availability of borrowings for

Russian banks in the external market.

In general, the instability and hetero-

geneity of social and economic develop-

ment in Russia during 2010, and gener-

ally fragile positive trends demonstrate

the need to continue anti-crisis meas-

ures by the government and more in-

tensive measures to reform the structure

of the Russian economy.

MICEX Index, points

60

65

70

75

80

85

90

95




33

34

35

36

37

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1.800

2006

16.5187.2

2007

22.9250.4

2008

24.7316.7

2009

28.5389.1

2010

38.2441.5

16,522,924,728,538,2

187,2250,4316,7389,1441,5

2006

6.80

2007

16.72

2008

28.22

2009

30.19

2010

41.75

187,2250,4316,7389,1441,5

2006

0.81 0.39

2007

2.281.42

2008

3.151.88

2009

3.811.94

2010

4.212.45

0.04 0.33 0.81 0.91 1.23

2009 2010

2006

44.036.3

2007

44.157.8

2008

39.242.7

2009

5.021.2

2010

14.92.4

4444,139,2

514,9

36,357,842,721,22,4

2006

51.96.3

2007

60.58.0

2008

67.99.2

2009

75.911.9

2010

75.210.5

2006

833.9

2007

948.5

2008

1,852.2

2009

1,741.1

2010

1,951.6

51,960,567,975,9

76

6,38

9,211,910,6

2006

175.1

2007

201.6

2008

127.9

2009

196.0

2010

221.9

175,1 201,6 127,9 196,0 221,9

2006 2007 2008 2009 2010

273.1 346.2 557.3 723.3 988.2

2006 2007 2008 2009 2010

44.3 68.5 96.6 81.3 95.8

2006 2007 2008 2009 2010

225.5 284.6 510.0 710.2 947.0

2006 2007 2008 2009 2010

75.9 106.7 132.6 170.6 238.4

2006 2007 2008 2009 2010

26.9 22.1 9.2 14.8 16.8

2006 2007 2008 2009 2010

21.7 19.9 7.8 9.6 10.6

2006 2007 2008 2009 2010

0.4 0.9 1.5 3.9 2.1

2006 2007 2008 2009 2010

3.9 3.3 3.6 6.9 4.7

2006 2007 2008 2009 2010

37.8 18.0 -34.4 36.4 29.6

2006 2007 2008 2009 2010

6.3 3.0 -5.5 3.1 3.7

2005

1.39.0

2006

5.410.7

2007

5.45.5

2008

37.425.6

2009

58.131.6

2010

59.225.9

2005

29.814.3

2006

82.550.5

2007

128.296.9

2008

160.6145.7

2009

186.5183.9

2010

217.1228.6


17

The Russian Banking System in 2010

As of the end of 2010, 1,012 credit or-

ganizations operated in Russia, including

955 banks. In 2010, major multibranch

banks, while expanding their presence

in the regional markets of banking ser-

vices, simultaneously pursued a policy

aimed at reducing costs through the

optimization of their regional opera-

tions. The number of the existing credit

organizations’ branches (exclusive of

OAO Savings Bank of Russia) reduced

from 2,538 to 2,352 (by 7.3%). The Sav-

ings Bank of Russia also continued its

efforts aimed at optimizing its branch

network which resulted in 2010 in the

reduction of its branches by 71 (11.0%).

Simultaneously with the reduction

of branches in 2010, the number of

supplementary and operational offices

increased. The total number of inter-

nal structural units in organizations in-

creased by 884 units during the year to-

taling 38,431 as of January 01, 2011. This

resulted in the number of banks’ subdi-

visions increasing in 2010 from 26.5 to

27.1 per 100,000 persons.

The aggregate capital of the banking

system exceeded RUR 4.7 trillion and in-

creased by 2.4% during the year, with the

ratio of the aggregate capital of the bank-

ing system to GDP having reduced from

11.9% to 10.5%. Aggregate assets were

growing up at a higher rate (a 14.9% in-

crease) and totaled, at the end of the year,

RUR 33.8 trillion or 75.2% of GDP. The top

five banks’ share in the total assets of the

banking system is 47.7%.

The aggregate share of assets of the

banks, in which more than 50% of share

capital (191 banks) is held by non-resi-

dent, was 18% of assets and 19% of the

capital of the whole banking system.

The post-crisis rehabilitation of

economy in 2010 entailed an increase

in demand for bank loans both on the

part of corporate borrowers and on the

part of citizens. The main portion of the

increase in lending volumes fell at the

second half of the year under review. At

year-end, the increase in the amount of

loans extended to non-financial organi-

zations was 12.1% and loans extended

to individuals was 14.3%. The amount

of overdue corporate loans reduced

by 14.6% and amount of overdue retail

loans increased by 16.6%.

The growth rates of the banking

system’s resource base significantly

outstripped the growth rates of the

loan portfolio. The amount of money

raised from organizations increased, at

the end of the year, by 16.4%, exceed-

ing RUR 11.1 trillion. The amount of

deposits raised from individuals was

RUR 9.8 trillion or 29% of the banking

system’s liabilities, having increased in

the year by 31.2%.

Banking system assets and capital, % of GDP

60

65

70

75

80

85

90

95




33

34

35

36

37

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1.800

2006

16.5187.2

2007

22.9250.4

2008

24.7316.7

2009

28.5389.1

2010

38.2441.5

16,522,924,728,538,2

187,2250,4316,7389,1441,5

2006

6.80

2007

16.72

2008

28.22

2009

30.19

2010

41.75

187,2250,4316,7389,1441,5

2006

0.81 0.39

2007

2.281.42

2008

3.151.88

2009

3.811.94

2010

4.212.45

0.04 0.33 0.81 0.91 1.23

2009 2010

2006

44.036.3

2007

44.157.8

2008

39.242.7

2009

5.021.2

2010

14.92.4

4444,139,2

514,9

36,357,842,721,22,4

2006

51.96.3

2007

60.58.0

2008

67.99.2

2009

75.911.9

2010

75.210.5

2006

833.9

2007

948.5

2008

1,852.2

2009

1,741.1

2010

1,951.6

51,960,567,975,9

76

6,38

9,211,910,6

2006

175.1

2007

201.6

2008

127.9

2009

196.0

2010

221.9

175,1 201,6 127,9 196,0 221,9

2006 2007 2008 2009 2010

273.1 346.2 557.3 723.3 988.2

2006 2007 2008 2009 2010

44.3 68.5 96.6 81.3 95.8

2006 2007 2008 2009 2010

225.5 284.6 510.0 710.2 947.0

2006 2007 2008 2009 2010

75.9 106.7 132.6 170.6 238.4

2006 2007 2008 2009 2010

26.9 22.1 9.2 14.8 16.8

2006 2007 2008 2009 2010

21.7 19.9 7.8 9.6 10.6

2006 2007 2008 2009 2010

0.4 0.9 1.5 3.9 2.1

2006 2007 2008 2009 2010

3.9 3.3 3.6 6.9 4.7

2006 2007 2008 2009 2010

37.8 18.0 -34.4 36.4 29.6

2006 2007 2008 2009 2010

6.3 3.0 -5.5 3.1 3.7

2005

1.39.0

2006

5.410.7

2007

5.45.5

2008

37.425.6

2009

58.131.6

2010

59.225.9

2005

29.814.3

2006

82.550.5

2007

128.296.9

2008

160.6145.7

2009

186.5183.9

2010

217.1228.6

Assets Liabilities

Change in banking system assets and capital, 2006-2010, % , y-o-y

60

65

70

75

80

85

90

95




33

34

35

36

37

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1.800

2006

16.5187.2

2007

22.9250.4

2008

24.7316.7

2009

28.5389.1

2010

38.2441.5

16,522,924,728,538,2

187,2250,4316,7389,1441,5

2006

6.80

2007

16.72

2008

28.22

2009

30.19

2010

41.75

187,2250,4316,7389,1441,5

2006

0.81 0.39

2007

2.281.42

2008

3.151.88

2009

3.811.94

2010

4.212.45

0.04 0.33 0.81 0.91 1.23

2009 2010

2006

44.036.3

2007

44.157.8

2008

39.242.7

2009

5.021.2

2010

14.92.4

4444,139,2

514,9

36,357,842,721,22,4

2006

51.96.3

2007

60.58.0

2008

67.99.2

2009

75.911.9

2010

75.210.5

2006

833.9

2007

948.5

2008

1,852.2

2009

1,741.1

2010

1,951.6

51,960,567,975,9

76

6,38

9,211,910,6

2006

175.1

2007

201.6

2008

127.9

2009

196.0

2010

221.9

175,1 201,6 127,9 196,0 221,9

2006 2007 2008 2009 2010

273.1 346.2 557.3 723.3 988.2

2006 2007 2008 2009 2010

44.3 68.5 96.6 81.3 95.8

2006 2007 2008 2009 2010

225.5 284.6 510.0 710.2 947.0

2006 2007 2008 2009 2010

75.9 106.7 132.6 170.6 238.4

2006 2007 2008 2009 2010

26.9 22.1 9.2 14.8 16.8

2006 2007 2008 2009 2010

21.7 19.9 7.8 9.6 10.6

2006 2007 2008 2009 2010

0.4 0.9 1.5 3.9 2.1

2006 2007 2008 2009 2010

3.9 3.3 3.6 6.9 4.7

2006 2007 2008 2009 2010

37.8 18.0 -34.4 36.4 29.6

2006 2007 2008 2009 2010

6.3 3.0 -5.5 3.1 3.7

2005

1.39.0

2006

5.410.7

2007

5.45.5

2008

37.425.6

2009

58.131.6

2010

59.225.9

2005

29.814.3

2006

82.550.5

2007

128.296.9

2008

160.6145.7

2009

186.5183.9

2010

217.1228.6

Assets Capital

PERFORMANCE RESULTS AND DEvELOPMENT PROSPECTS

18

Group’s Financial Totals and Performance Indicators

Gazprombank Group’s business is

conducted within individual opera-

tional business units, which are primar-

ily represented by banking and non-

financial assets consolidated in the

Group’s financials.

Gazprombank Group’s consolidated

assets at year-end increased by 12% to

RUR 1,951.6 billion.

In 2010, Gazprombank continued

to expand its lending operations using

both existing and new customers rep-

resenting the strategic sectors of the

national economy. The loan portfo-

lio, including all allowances, increased

by 34.7% compared with 2009, to

RUR 1,084.0 billion. At the same time,

the amount of corporate loans increased

by 36.6% and totaled RUR 988.2 billion.

The amount of retail loans also increased

from RUR 81.3 billion at year-end 2009 to

RUR 95.8 billion as of January 1, 2011.

The most significant growth in

corporate loans was achieved by

loan portfolios servicing the metal-

lurgy, telecommunications, oil & gas,

agriculture, transportation and food

industries.

At the end of 2010, the level of

non-performing loans (aggregate loans

remaining past due for more than

90 days) decreased both in absolute

terms and in relation to the size of the

The main financial performance indicators of Gazprombank Group

Dec 31, 2010, RUR billion

Dec 31, 2009, RUR billion

Change in 2010

Assets 1951.6 1741.1 +12.1%

Equity 221.9 196.0 +13.2%

Loans provided to corporate customers 988.2 723.3 +36.6%

Retail loans 95.8 81.3 +17.9%

Securities 233.6 182.6 +27.9%

Funds held for corporate customers 947.0 710.2 +33.3%

Amounts owed to individuals 238.4 170.6 +39.8%

Issued securities 145.3 169.1 –14.1%

Subordinated deposits 143.4 144.6 –0.8% Capital adequacy (Basel I), % 16.8 14.8 +2.0 pct.

Tier 1 capital adequacy, % 10.6 9.6 +0.9 pct.

Ratio of non-performing loans to loan portfolio, % 2.1 3.9 -1.8 pct.

Ratio of loan loss provisions to loan portfolio, % 4.7 6.9 -2.2 pct.

2010 2009 Change in 2010

Net profit of the Group, RUR billion 66.3 58.8 +12.8%

Total income of the Group, RUR billion 76.6 65.1 +17.6%

ROAE, % 29.6 36.4

ROAA, % 3.7 3.1

Net interest margin, % 2.5 2.6

Ratio of operating expenses to operating income, % 32.1 18.9


19

loan portfolio (2.1% compared to 3.9% at

year-end 2009).

The improvement in the quality of

Gazprombank’s loan portfolio resulted

in the reduction of loan loss allowances

from 6.9% of the total loan portfolio at

year-end 2009, to 4.7% as of January 1,

2011. As of year-end 2010, loan loss pro-

visions covered non-performing loans

by more than 2.2 times.

Gazprombank Group has increased

its securities portfolio by 27.9% to

RUR 233.6 billion, primarily thanks to

increasing investments in Russian cor-

porate bonds (+31%) and government

bonds (+79%).

In 2010, the share of customer mon-

ey in liabilities increased from 57.0% to

68.5%. At year-end 2010, money raised

from customers totaled RUR 1,185.4 bil-

lion, having increased by 34.6% during

the year. At the same time, money raised

from corporate customers increased by

33.3% to RUR 947 billion in 2010. Mon-

ey raised from individuals increased by

39.8% to RUR 238.4 billion. The ratio of

loans, including allowances, to funds

raised from customers was 91.5% as of

the January 2011, compared to 91.3% at

year-end 2009.

The Group’s capital has increased

by 13.2% since year-end 2009, to

RUR 221.9 billion. Capital adequacy calcu-

lated as required by the Basel Agreement

(Basel I) was 16.8% as of January 1, 2011,

compared with 14.8% at year-end 2009;

tier I capital adequacy was 10.6% com-

pared to 9.7% in 2009. Therefore, capital

adequacy figures are significantly higher

than the minimum level required by the

Basel Agreement and demonstrates the

efficiency of capital, including sufficiency

for covering unexpended losses.

Gazprombank Group’s net prof-

its totaled RUR 66.3 billion in 2010,

Loan portfolio breakdown as of December 31, 2010

Industry 2010, RUR billion

Share, %

Change in 2010, pct.

Metal manufacture 226,208 21.0 2.9

Acquisition finance 193,250 17.9 11.2

Gas extraction, transportation and sales enterprises

108,367 10.0 -2.2

Individuals 95,832 8.8 -1.3

Mining 52,649 4.9 -1.1

Oil extraction, transportation, sales enterprises, and petrochemical industries

81,163 7.5 1.5

Electric power industry 49,294 4.5 -0.7

Machine building 39,570 3.7 -1.5

Real estate construction 34,946 3.2 0.0

Telecommunications 33,739 3.1 1.1

Nuclear industry 27,881 2.6 -2.7

Agriculture 23,921 2.2 0.2

Financing and investment companies

20,792 1.9 -2.0

Food industry 19,990 1.8 1.1

Transport 19,927 1.8 1.2

Other 56,472 5.1 -7.7

60

65

70

75

80

85

90

95




33

34

35

36

37

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1.800

2006

16.5187.2

2007

22.9250.4

2008

24.7316.7

2009

28.5389.1

2010

38.2441.5

16,522,924,728,538,2

187,2250,4316,7389,1441,5

2006

6.80

2007

16.72

2008

28.22

2009

30.19

2010

41.75

187,2250,4316,7389,1441,5

2006

0.81 0.39

2007

2.281.42

2008

3.151.88

2009

3.811.94

2010

4.212.45

0.04 0.33 0.81 0.91 1.23

2009 2010

2006

44.036.3

2007

44.157.8

2008

39.242.7

2009

5.021.2

2010

14.92.4

4444,139,2

514,9

36,357,842,721,22,4

2006

51.96.3

2007

60.58.0

2008

67.99.2

2009

75.911.9

2010

75.210.5

2006

833.9

2007

948.5

2008

1,852.2

2009

1,741.1

2010

1,951.6

51,960,567,975,9

76

6,38

9,211,910,6

2006

175.1

2007

201.6

2008

127.9

2009

196.0

2010

221.9

175,1 201,6 127,9 196,0 221,9

2006 2007 2008 2009 2010

273.1 346.2 557.3 723.3 988.2

2006 2007 2008 2009 2010

44.3 68.5 96.6 81.3 95.8

2006 2007 2008 2009 2010

225.5 284.6 510.0 710.2 947.0

2006 2007 2008 2009 2010

75.9 106.7 132.6 170.6 238.4

2006 2007 2008 2009 2010

26.9 22.1 9.2 14.8 16.8

2006 2007 2008 2009 2010

21.7 19.9 7.8 9.6 10.6

2006 2007 2008 2009 2010

0.4 0.9 1.5 3.9 2.1

2006 2007 2008 2009 2010

3.9 3.3 3.6 6.9 4.7

2006 2007 2008 2009 2010

37.8 18.0 -34.4 36.4 29.6

2006 2007 2008 2009 2010

6.3 3.0 -5.5 3.1 3.7

2005

1.39.0

2006

5.410.7

2007

5.45.5

2008

37.425.6

2009

58.131.6

2010

59.225.9

2005

29.814.3

2006

82.550.5

2007

128.296.9

2008

160.6145.7

2009

186.5183.9

2010

217.1228.6

PERFORMANCE RESULTS AND DEvELOPMENT PROSPECTS GROUP’S FINANCIAL TOTALS AND PERFORMANCE INDICATORS

20

compared with RUR 58.8 billion in 2009.

Its total income totaled RUR 76.6 billion

in 2010 compared with RUR 65.1 billion

in 2009. Return on equity in 2010 was

29.6% and return on assets was 3.7%.

In 2010, the market faced a general

downward trend in interest rates which

maintained income for banks from lend-

ing and commission operations stable

during 2010 at RUR 40.1 billion, a level

comparable to 2009. In general, net in-

terest margin was 2.5% in 2010, nearly

unchanged from 2009 (2.6%). At the

same time, the second half of 2010 wit-

nessed an upward trend in relation to

the net interest market due to a decrease

in the cost of the resource base.

Expenses incurred to create loan pro-

visions in 2010 were associated solely

with the growth of lending operations

and made up RUR 1.7 billion.

Profits from other securities trans-

actions totaled RUR 4.6 billion in 2010,


The value of the Group’s industrial as-

sets increased in 2010 to RUR 37.7 billion


Industrial assets in 2010 included those in

the petrochemical segment (SIBUR Hold-

ing Group), machine-building segment

(OMZ Group and a number of other as-

sets), media business (Gazprom Media

Group) and a series of other investments.

In 2010, Gazprombank sold a series

of investments in non-banking assets, in

particular, 51% of shares in OAO Sibneft-

egaz, and 25% of shares in CJSC SIBUR

Holding. Profits from those transactions

were RUR 23.3 billion. Apart from the

sale of the block of shares in CJSC SIBUR

Holding, Gazprombank’s management

decided to sell its remaining share in the

company. As a result, the Group stopped

consolidating the financial indicators of

SIBUR Holding Group in December 2010.

In 2010, net income from FX trans-

actions including those resulting from

the revaluation of forward transactions

totaled RUR 12.3 billion compared with

RUR 28.0 billion recorded in 2009.

In spite of its significant indicators of

business growth, Gazprombank strictly

monitors the level of its personnel-re-

lated expenses and other administrative

costs. In 2010, the ratio of operating ex-

penses to operating income was 32.1%.

This is within the target range set by

the bank for controlling the level of its

expenses.

As a result of the sale of non-bank-

ing investments, Gazprombank expects

growth to further exceed 2010 for its

main banking business in 2011.


21

Development Strategy for 2011-2015

In the year under review, the Bank

summarized the results of implementing

the Strategy until 2010 and developed

the new Strategy until 2015, which has

been approved by the Bank’s Board of

Directors.

Gazprombank’s performance during

the last 5 years demonstrates its high lev-

el of competitiveness and strengthening

positions in the Russian banking sector.

THE TARGETS SET FOR BUSINESS AREAS BY THE END OF 2010 HAVE BEEN SURPASSED THE GROWTH RATES OF BANK’S ASSETS HAVE NOTICEABLY EXCEEDED SECTOR AVERAGES. THE INCREASE IN THE SIZE OF ASSETS WAS PRIMARILY FACILITATED BY CONSUMER LOANS.

The customer base and product line

have been significantly diversified large-

ly due to the introduction of investment

banking products and services; the sales

network has been expended in perspec-

tive business regions. The trends and

conditions for growing the Bank’s busi-

ness have required a significant increase

in its capital that has been successfully

completed.

The results from implementing the

Strategy until 2010 have validated the

adopted strategic course and helped

establish development priorities for the

next 5 years. In setting long-term plans,

the development goals set for the Rus-

sian economy have been taken into

account, first of all, its modernization

goals as well as the provisions and pa-

rameters of the development strategy

set for the Russian Federation banking

sector for 2011-2015.

The development strategy set for

2011-2015 aims to increase sharehold-

er value for GPB and maintain at least

third place in the banking industry in

terms of assets. The banking segment

of GPB Group will continue to develop

on the principles of universalization and

further diversification of its customer

base, industries served and product

lines. To maintain and strengthen GPB

Groups’ position in the banking system,

it is planned to more than double assets,

primarily by increasing the share of cus-

tomer loans in the Bank’s assets.

Servicing with the largest customers is

one of Gazprombank’s main competitive

advantages. The development of stable

long-term relations with these custom-

ers is one of the key strategic objectives.

By the end of 2015, the Bank’s corporate

loan portfolio will make up more than

60% of the assets belonging to GPB

Group’s banking segment. For this pur-

pose, the amount of loans extended to

corporate customers will more than dou-

ble. There will be a noticeable increase in

the amount of investment lending.

The structure of the loan portfolio

will undergo certain changes in relation

to its customer segments. The largest

businesses will remain a target customer

segment in lending operations. At the

same time, it is proposed to diversify the

loan portfolio by increasing the share of

loans extended to mid-sized corporate

customers.

Another important strategic goal for

Gazprombank is the strengthening of

its position among the leading Russian

banks offering investment banking ser-

vices. That will be achieved by expanding

the product line and increasing the cus-

tomer base.

It is planned to further improve and

extend efforts in financial markets, to

become one of the top three players in

the Russian OTC market, and to increase

the Bank’s share of the syndicated fi-

nance and asset securitization markets.

Gazprombank intends to continue to

implement its primary and secondary

share and bond placement programs,

to offer investment advisory services, in-

cluding those for privatization deals, as

well as advisory and financing services

for mergers and acquisitions. The intend-

ed outcome of these efforts is nearly

a three-fold growth in commission rev-

enues from investment business.

The highly efficient management of

the portfolio of shares in rapidly growing

and highly liquid companies, ensuring

an increase in the value of investments

and their subsequent sale with a high

level of return, will enable the Bank to

increase its income from transactions in

assets of that type.

In its work with retail customers,

Gazprombank aims to maintain priori-

ties for providing services to the em-

ployees of corporate customers. The

main mission is to increase income

from retail lending operations and of-

fer a wide range of services to retail

customers. The retail loans portfolio is

expected to increase by almost three

times. Increase in mortgage-backed

PERFORMANCE RESULTS AND DEvELOPMENT PROSPECTS

22

lending for the employees of Gazprom

Group and other corporate customers,

representing petochemical, nuclear, oil

and power sectors is a top-priority task.

Dynamic growth in the retail business

will be ensured by improving banking

technology.

The implementation of key strategies

will increase profit and capital for GPB

Group and ensure competitive growth

rate for its assets. The performance

achieved (return on assets and equity)

also demonstrates GPB Group’s poten-

tial to remain highly competitive from

2011 to 2015 while growing.

Participation in Federal and Regional Programs and Projects

CONFIRMING ITS STATUS AS A BACKBONE BANK WITH STATE-ORIENTED THINKING, GAZPROMBANK ACTIVELY PARTICIPATES IN THE IMPLEMENTATION OF FEDERAL AND REGIONAL ECONOMIC AND FINANCIAL PROGRAMS.

Gazprombank, as an authorized

bank, finances contractors who are par-

ties to government contracts within the

“Housing” federal target program and

activities of MC LLC Skolkovo within the

“Education” federal target program.

Implementation of the “Mortgage

for servicemen” mortgage loan pro-

gram was started under an agree-

ment executed between the Bank and

FGU Rosvoenipoteka.

The Bank also finances enterprises

belonging to the agro-industrial com-

plex within the Top-Priority National Pro-

ject “Development of the Agro-Industrial

Complex”. RUR 19.8 billion of loans have

been extended since 2006 to finance

the construction of large livestock and

poultry facilities initiated by Russian

agro-industrial holdings in the Orel, Li-

petsk, Sverdlovsk and Belgorod regions.

As of January 1, 2011, the total financing

provided by the Bank for the project ex-

ceeded RUR 40 billion.

Gazprombank provides a set of

banking services to participants in the

“Program on Constructing Olympic Fa-

cilities and Developing Sochi as a Moun-

tain Climate Resort”. As to the “Devel-

opment of the Transport System of the

Russian Federation (Years 2010 to 2015)”

program, the Bank is acting as a financial

adviser and underwriter for the project

designed to reconstruct federal highway

M-1 “Belarus” Moscow — Minsk”.

Gazprombank is actively participating

in the implementation of the govern-

ment’s environmental and climate pol-

icy on a corporate level. As part of efforts

to implement the environmental mecha-

nisms contemplated by the Kyoto Proto-

col to the UN Framework Convention on

Climate Change, Gazprombank jointly

incorporated the special purpose carbonic

company Carbon Trade and Finance S.A.

(CTF) with Dresdner Bank (Germany)

(currently Commerzbank) in 2006. A full

range of services to implement carbonic

projects are being provided to Russian

companies that have emission sources.

By the end of 2010, CTF had created

a portfolio of contracts to buy 6% of the

Russian ЕСВ market. In 2010, the Govern-

ment approved three projects prepared

jointly with the Bank’s strategic partners

MMK, OJSC Oil Company Rosneft and

OAO RUSAL Krasnoyarsk. In the report-

ing year, CTF once again ranked No.1 in

the Environmental Rankings of the inter-

national edition of Energy Risk in the cat-

egory “Primary market of carbon units”.

Gazprombank is an active participant

in the efforts being taken to develop the

financial infrastructure of the Russian

market.

In particular, the development of

the project to arrange exchange com-

modity trades on the Saint-Petersburg

International Mercantile Exchange

(ZAO SPIMEX) continued at impres-

sive rates in 2010. A regulatory base

and technological support for clear-

ing services to be provided to traders

based on RDK (ZAO)’s clearing system

were prepared using advanced for-

eign practices with the involvement

of Gazprombank’s specialists to ensure

access to a wide range of settlement

services and banking products. During


23

the reporting year, ZAO SPIMEX’s com-

plex — RDK (ZAO) covered up to 10%

of sales in the domestic oil product

market made using exchange tech-

nologies with a stable increase in spot

trades up to 15% of the domestic out-

put of that commodity group.

In addition, proper attention was paid

to improving exchange trade arrange-

ments for natural gas within the efforts

being made to develop partnerships

with the gas industry. That work with

Gazprom Group was structured in line

with the action plan of the Temporary

Working Committee on arranging ex-

change trades in gas (Order No.64 issued

by OAO Gazprom on March 18, 2010).

During the implementation of these

measures with Gazprombank specialists,

RDK (ZAO) and OOO Gazprom Mezhre-

giongaz, trained potential traders and

tested the settlement and clearing com-

plex and trading platform. Full readiness

for servicing trades in natural gas futures

was confirmed.

All branches of the Bank are involved

in implementing the National Projects

“Housing” and “Development of the

Agro-Industrial Complex” and a federal

program on subsidizing the utilization of

old cars.

The Bank’s branches are participat-

ing in the implementation of a number

of regional programs designed to pro-

vide young families with dwellings, de-

velop and support small and mid-sized

businesses and develop physical cul-

ture and sports. Throughout 2010, the

Bank provided significant financial sup-

port to regional backbone enterprises;

aid was also provided for implement-

ing anti-crisis measures in regions.

PERFORMANCE RESULTS AND DEvELOPMENT PROSPECTS PARTICIPATION IN FEDERAL AND REGIONAL PROGRAMS AND PROJECTS

24

Classic Banking Services

Corporate Business

Providing banking services to corporate

clients remains the primary line of business

for Gazprombank Group. During the report-

ing year, Gazprombank continued to devel-

op on the principles of versatility, focusing

on the market demand of target customer

segments, both major companies, holdings

and a wide range of mid-sized corporate

customers, 45,000 in all.

THE BANK MANAGED NOT ONLY TO STRENGTHEN ITS POSITIONS IN ITS STRATEGICALLY IMPORTANT TRADITIONAL SECTORS OF ECONOMY, BUT ALSO STARTED TO WORK WITH CUSTOMERS REPRESENTING NEW INDUSTRIES. APART FROM THE EXPANSION OF ITS CUSTOMER BASE INSIDE THE COUNTRY, GAZPROMBANK IS ACTIVELY INTERACTING WITH THE MOST PROMISING MAJOR ENTERPRISES IN UKRAINE AND BELARUS.

As of December 31, 2010 the share

of large-scale and major corporate cli-

ents in Group’s loan portfolio exceed-

ed 92%.

One of Gazprombank’s top-priority

strategic plan is to further increase vol-

umes related to customers in the mid-

sized segment. In the year under review,

this portion of the Bank’s portfolio more

than doubled; industry standards for

selling loan products were introduced.

The product line for mid-sized compa-

nies is constantly being improved.

Gazprombank provides packaged

banking services to the enterprises of

OAO Gazprom and the gas industry.

As in previous years, special attention

was paid in 2010 to projects imple-

mented within the strategic partnership

with Gazprom, in particular, to manag-

ing internal cash flows and monitoring

payments. For the benefit of Gazprom

Group, a cash pooling service (in Ru-

bles and foreign currencies) has been

successfully introduced and highly

rated by Gazprom management. Most

of Gazprom’s subsidiary companies,

branches and representative offices

across several time zones have been

connected to the system which allows

on-line monitoring of cash movements

within Gazprom Group’s accounts, to

create market conditions for investing

temporarily free cash equal for all mem-

bers and to increase the effectiveness of

such investments.

The provision of operational

loans has been arranged for suppli-

ers and contractors directly involved in

Gazprom’s investment program.

Within the successful performance

of a payment agent charged with the

payment of income on securities, divi-

dends were paid to 545,000 sharehold-

ers of OAO Gazprom in 2010. The lump

sum payment technologies offered by

Gazprombank, unique in Russia for pay-

ing income to significant numbers of

shareholders, help ensure that the issuer

will continue to comply with its statu-

tory duty to pay dividends no later than

60 days after Gazprom’s General Meet-

ing of Shareholders adopts relevant

resolutions.

A f ru i t fu l pa r tnersh ip wi th

OAO Novatek, one of the largest inde-

pendent gas producers, continued in

2010 and partnerships were established

with ZAO Nortgaz, another gas produc-

er, for whom settlement accounts were

opened and a credit risk limit was set.

Gazprombank is actively partnering

with companies in the power indus-

try. In 2010, settlement accounts were

opened for all branches of JSC FGC UES

(Backbone Electric Networks and En-

terprises Operating Backbone Electric

Network) with the Bank’s branches and


25

head office. Gazprombank acted as one

of the arrangers in offering corporate

bonds issued by JSC FGC UES.

In developing its business with the

Group of INTER RAO UES companies, the

Bank began to provide services to the

energy sales companies of the Group

and a cash pooling services was initi-

ated for INTER RAO UES and its subsidi-

aries JSC OGK-1, OAO Mosenergosbyt,

OJSC Altayenergosbyt, OAO Petersburg

Retail Company, OAO Saratovenergo

and OJSC Tambov Energy Sales Com-

pany. The Bank is the exclusive provid-

er of payment processing services to

OAO Mosenergosbyt for customer ener-

gy bills. A brokerage services agreement

was executed with OAO RAO Energy

System of East.

In 2010, the Bank continued its part-

nership with companies in the chemi-

cal and petrochemical industries. With

the addition of OAO Moscow Refinery,

the number of major Russian refineries

receiving services from GPB (OJSC) has

increased to 20.

Salary-related projects have been

managed through GPB’s branch net-

work for OJSC Tyre Enterprise Amtel-

Povolzhye and Voronezh Tyre Plant

managed by OJSC SIBUR-Russian Tyres.

The number of the officers employed

by those companies receiving salary us-

ing GPB’s plastic cards has increased to

20,000 persons.

To support construction of a modern

facility for producing polypropylene in

the Russian Federation, GPB (OJSC) has

issued various types of guarantees for

OOO Tobolsk-Polymer, a subsidiary of

CJSC SIBUR Holding, in favor of licensors

and equipment suppliers.

Packaged services have been pro-

vided to OAO Tomskneft-VNK (the larg-

est oil producing company in Tomsk

Region), as part of oil and gas industry

under the strategic partnership between

JSC Gazprom Neft and OJSC Oil Com-

pany Rosneft.

In 2010, Gazprombank significantly

strengthened its position as a bank pro-

viding services to OJSC ANK Bashneft.

To develop a strategic partnership with

OJSC ANK Bashneft, the Bank has es-

tablished a loan and documentary limit

to finance the company’s day-to-day

operations.

The Bank is the support bank for

the nuclear power sector of the Rus-

sian Federation and holds leading po-

sitions with cash flow processing for

a number of enterprises of the State

Atomic Energy Corporation ROSATOM.

The Bank’s customers include more than

160 of the State Corporation’s subsidiaries

(57 new customers were attracted during

the year) including, inter alia, OAO Atom-

energoprom, OJSC Rosenergoatom Con-

cern, JSC TVEL, ARMZ Uranium Holding

Co., JSC Techsnabexport, all major pro-

duction companies and research centers.

In 2010, the Bank participated in all major

projects by companies in the industry, in-

cluding the following:

● Arranged a RUR 10 billion bonded

debt for OAO Atomenergoprom;

● Implemented service to reallocate

funds between customer bank ac-

counts — cash pooling with the

group of TVEL Fuel Company and

ARMZ Uranium Holding Co.;

● Supported international projects ini-

tiated by the ARMZ Uranium Holding

Co. to acquire uranium assets.

Gazprombank is one of the major

financial partners of the metallurgical

and coal industries. The total amount of

financing provided to major metallurgi-

cal companies in 2010 was more than

RUR 170 billion and over RUR 268 billion

including financing provided to bor-

rowers from the adjacent coal industry.

It is necessary to separately note the

increased volume of business with the

major ferrous and non-ferrous metallur-

gy holding companies such as Mechel

OAO, OAO TMK, EVRAZ Group S.A.,

OJSC Novolipetsk Steel, UC RUSAL, Russ-

kaya Mednaya Kompaniya ZAO, UMMC,

MMK and major coal companies such as

OJSC SUEK, JSC “CC” Kuzbassrazrezugol,

SBU Holding, OJSC Zarechnaya Mine

and Mechel-Mining OAO.

Special emphasis must be placed on

Gazprombank’s role in financing invest-

ment projects, whose completion was

critical for companies in those sectors.

Among major projects, the Bank’s par-

ticipation in financing the construction

of a universal rail and structural steel mill

at the Chelyabinsk Metallurgical Plant

(Mechel Group) is noteworthy.

With representative offices in China

and India and subsidiary banks in Swit-

zerland and Belarus, Gazprombank is

able to actively partner with the largest

metallurgical holdings, including those

outside the Russian Federation. The Bank

participates in providing syndicated and

commercial loans both to major Russian

holding companies and to enterprises in

the promising market of CIS countries,

e.g. Metinvest, a major Ukrainian metal-

lurgical holding.

In developing its partnership with

the subsidiaries of Russian Federal

Space Agency, the Bank has signed

a Partnership Agreement with the Inter-

national Association of Space Activities

Participants.

The main element of the Bank’s busi-

ness with companies in the defense

industry and machine-building sector

is the development of a set of corpo-

rate solutions including both banking

CLASSIC BANkING SERvICES CORPORATE BUSINESS

26

products and other products custom-

ized for each enterprise.

The specific nature of Russian-made

military products supplied to foreign

countries, and increased competition

between major players in the global

market require active banking support

for export contracts which Gazprom-

bank provides to Russian companies in

close cooperation with State Corpora-

tion Rosoboronexport.

The Bank paid particular attention

to the top-priority projects initiated by

the Russian defense industry and an-

nounced by the Russian Government

in 2010. These projects are designed to

upgrade industry facilities, finance new

development and enhance the compet-

itiveness of military products made by

Russian companies by, inter alia, structur-

ing proposals to finance foreign buyers

and using offset programs.

One of the results of the Bank’s joint

activities with the Federal Service for Mil-

itary-Technical Cooperation (FSMTC) was

Gazprombank’s decision to create the

“Golden Idea” Fund in 2010, to facilitate

military and technical cooperation and

to hold an anniversary competition to

award the National Prize “Golden Idea” in

December 2010.

Gazprombank’s representatives joined

working teams established for interacting

with Russian Technologies State Corpora-

tion, and, inter alia, for dealing with issues

related to creating a single settlement

center for the Corporation. During the

year, the Bank managed to organize work

on trilateral cooperation between the

corporate customers of OMZ Group, the

Bank and OMZ to boost the sales of the

Group’s products and to provide financial

support to buyers.

In 2010, Gazprombank actively

developed relations with companies

in the transportation and transport

infrastructure industries. Currently,

the Bank’s customers include major

transportation companies such as

OJSC Aeroflot-Russian Airlines, Russian

Railways, OJSC Transaero and a num-

ber of others.

Particular emphasis in this sector is

placed on the Bank’s partnerships with

companies that construct transportation

infrastructure. Gazprombank is a leading

service provider to most of the major

contracts within governmental and re-

gional programs for reconstructing exist-

ing roads and constructing new facilities

for upcoming large-scale events (e.g.

APEC Summit 2012 in Vladivostok, Olym-

pic Games in Sochi in 2014). In 2010, the

Bank actively developed its partnership

with OJSC MOSTOTREST, setting a total

credit risk limit over RUR 25 billion and

issuing a bank guarantee to secure its

obligations under a Government Con-

tract for RUR 18.2 billion.

Gazprombank was the first bank to

enter into a partnership agreement with

the State Company Russian Highways

and to complete a transaction associat-

ed with an offering of Ruble-denominat-

ed bonds issued by the State Company.

The Bank’s main customers from the

communication industry include the

companies of the united holding Rost-

elecom, JSFC Sistema, MTS, FSUE Post of

Russia.

Gazprombank constructively inter-

acts with governmental authorities of

the constituent entities of the Russian

Federation. In 2010, the Bank executed

Partnership Agreements with the Ad-

ministrations of the Rostov region, Re-

public of Tatarstan and Sverdlovsk re-

gion. In aggregate, as of the beginning

of 2011, the Bank had executed Agree-

ments with 11 regional Administrations;

Agreements with another 14 constitu-

ent entities of the Russian Federation

(Republic of Chuvashia, Mariy-El and

Bashkortostan, Novosibirsk region) are in

a stage of preparation. The Bank consid-

ers its work with the constituent entities

of the Russian Federation as not only

a mere partnership with their Adminis-

trations, but also as an integrated work

involving all regional state-financed or-

ganizations, and as a way of expanding

its presence in a given region.

In 2010, the Bank actively financed

the agro-industrial complex and

companies in the food industry. The

Bank’s loan portfolio servicing these

companies exceeded RUR 40 billion at

year-end. The Bank partners with large

vertically integrated agricultural hold-

ings at a federal or regional level which

have their own raw materials base, pro-

cessing capacities, a stable ready-prod-

uct sales system as well as a stable fi-

nancial position. About 50% of loans are

used to finance investment projects, in-

cluding those under the “Development

of Agricultural Complex” National Priority

Project. Investment projects supported

with the Bank’s financial resources are

being successfully implemented in the

Orel, Lipetsk, Belgorod and Sverdlovsk

regions, the Republic of Tatarstan, Ud-

murtia and in other regions of the Rus-

sian Federation.

To expand its presence in the in-

surance market, the Bank increased its

share as a guarantor bank in the clear-

ing system to 22% in 2010, providing

settlement services to insurance com-

panies which provide MTPL coverage

on a direct loss recovery basis. The

amount of guarantee deposits placed

by companies providing MTPL cover-

age on accounts maintained with the

Bank exceeded RUR 1 billion.


27

In 2010, the Bank identified a new

segment in the settlement services mar-

ket and made arrangements to establish

a partnership with CJSC OSMP (QIWI

brand), a major operator of the instance

payment market, to create a single set-

tlement system for CJSC OSMP and pay-

ment agents in all regions where they

do business.

Gazprombank’s Settlement Cent-

er has been granted two awards by

Deutsche Bank AG for making error-free

payments both in Dollars and Euros. The

Bank has also been granted an award by

Commerzbank “For High Level of STP in

2009”.

Moreover, during the year it was de-

cided to develop the “financial supermar-

ket” institute and a development strategy

was formulated.

In particular, work has been done

to prepare and implement a project to

sell products from Non-State Pension

Fund GAZFOND related to mandatory

pension benefits for retail and corporate

customers in all operational subdivisions

of the Bank.

The Bank continued to actively ex-

pand its documentary credit business.

The amount of bank guarantees issued

by GPB (OJSC) was RUR 337.6 billion

(2,427 papers) in 2010, which is 2.5 times

higher than in 2009. At the same time,

the Bank’s total liabilities under these

guarantees were about RUR 210 billion

at the end of 2010.

The highest demand was from

companies in the machine-building,

metallurgical, energy, gas, oil and min-

ing industries. The amount of guar-

antees advised by the Bank totaled

RUR 28 billion.

In 2010, Gazprombank was one of

the first in the Russian market to devel-

op and implement procedures for issu-

ing the bank guarantees contemplated

by Article 176.1 of the Tax Code of the

Russian Federation, assuring repayment

to the budget of excessive amounts of

value added tax received by or refund-

ed to a tax payer upon its application.

The Bank’s strategic customers, such as

the subsidiaries of LUKOIL Group, SIBUR

Group, OJSC Gazprom Neftekhim Sala-

vat, KuibyshevAzot OJSC and OJSC Oil

Company Rosneft, were the first to re-

ceive such guarantees. At year-end 2010,

RUR 12 billion of these guarantees had

been issued.

At the request of the Bank’s custom-

ers and counterparty banks, 300 letters

of credit were opened for a total amount

of about RUR 34 billion; the amount

of transactions unsecured by the

Bank’s customers on the date the let-

ters of credit were opened was 78% of

the total amount of the transactions.

440 letters of credit for a total amount of

RUR 268 billion were advised by the Bank

which was 1.4 times higher than the pre-

vious year. In 2010, the Bank’s customers

started to more actively use collection

Growth trends in sales of integrated customer cash flow management services

Product Indicator Growth in 2010

Corporate settlement center Holdings using the product from 46 to 67; by 1.45 times

Customers (legal entities and branches) being members of such holdings

from 383 to 672; by 75%

Accounts connected to the service from 1308 to 2067; by 58%

Subsidiary structures of OAO Gazprom connected to the service

from 31 to 76; by 2.4 times

Gazprom Group's accounts connected to the service from 558 to 765; by 37%

Acceptance by a management company of payments from a specialized depository

Controlling specialized depositories from 7 to 10

Controlled management companies from 10 to 17

Accounts connected to the service from 204 to 331; by 62%

Redistribution of cash among customer bank accounts (virtual cash pooling)

Legal entities connected to the serviceThe service is provided to companies which are members of the following groups: SUEK, TVEL, ARMZ Uranium Holding Co., INTER RAO UES

from 32 to 70; by more than 2 times

Cash pooling for Gazprom Group Subsidiaries and branches of OAO Gazprom connected to the service

from 30 to 110

CLASSIC BANkING SERvICES CORPORATE BUSINESS

28

transactions for settling accounts with

counterparties to foreign trade contracts.

The Bank performed RUR 731.6 billion of

collection transactions.

During 2010, the Bank continued to

implement its strategy to further expand

trade finance transactions for corporate

customers and financial institutions. The

total amount of transactions performed

using trade finance instruments was

more than RUR 31 billion in 2010, which

is almost 3 times higher than in 2009.

The amount of transactions performed

at the request of corporate customers

exceeded RUR 27 billion, including fi-

nancing for import contracts using the

instruments of the documentary credit

business and funds raised from foreign

banks which totaled RUR 2.7 billon.

To increase the Bank’s commis-

sion income, active work was done

to expand the range and volume of

trade finance transactions performed

at the request of counterparty banks.

The total amount of the transactions

was RUR 3 billion. The volume of busi-

ness with the foreign banks, being

members of Gazprombank Group, was

increased during the year, in particu-

lar, with such banks as Belgazprom-

bank OJSC and AREXIMBANK —

GAZPROMBANK GROUP (CJSC). In 2010,

RUR 2.4 billion of transactions were

performed at the request of subsidiary

banks to make settlements in connec-

tion with the foreign trade business of

corporate customers.

Terms were negotiated and propos-

als were furnished to the Bank’s strate-

gic partners to finance projects imple-

mented with buyers from countries in

Asia, the Middle East, South America

and CIS within the government program

designed to support Russian industrial

export operations. For this purpose, two

projects associated with supplying Rus-

sian hi-tech equipment to Angola and

Ecuador are at the stage of coordinating

loan and security documentation with

the concerned borrowers.

The Bank’s top priority short-term

projects include the development of

the trade finance business as well as the

expansion of operations with exporters

under the government-backed program

to support industrial product exports.

At year-end 2010, Gazprom-

bank’s turnover from factoring transac-

tions was RUR 18.5 billion, which is more

than two times higher than 2009.

To further grow the business in this

area, GPB-factoring (LLC), a subsidiary of

the Bank, was incorporated. In Septem-

ber 2010, the first non-recourse factor-

ing transactions were performed. The

financing of Gazprombank’s branch

network customers was ensured via a re-

mote access system.

In 2010, the Bank introduced

a standard factoring financing pro-

gram for the suppliers of federal trade

networks which increased the qual-

ity of services offered to customers

thanks to accelerating limit setting

procedures.


29

Retail Business and E-Services

The development strategy for

Gazprombank’s retail business is aimed

at expanding and optimizing its cus-

tomer base and establishing a stable

group of individual customers consum-

ing bank products. The Bank’s main tar-

get customer segment is the officers of

corporate customers and third-party

individuals with a medium or high in-

come level.

The amount of deposits received

from individuals to accounts maintained

was RUR 238.4 billion as of January 1,

2011 (a 40% increase during 2010).

Gazprombank Group’s retail credit

portfolio was RUR 95.8 billion as of Janu-

ary 1, 2011, an 18% increase during year

which was significantly higher than mar-

ket averages.

The retail credit portfolio is currently

structured as follows: 68% — mortgage

loans, 18% — consumer loans, 12% —

car purchase, and 2% — credit cards. The

share of overdue loans in the Bank’s retail

portfolio at year-end was 3.2%, with the

totaling 3.8%.

Gazprombank traditionally offers the

officers of its corporate customers a wide

range of various lending programs.

Within its strategic partnership with

the gas sector, in 2010 the Bank devel-

oped and approved special mortgage

lending programs for the employees of

Gazprom Group.

The Bank executed a partnership

agreement with FGU Federal Depart-

ment of the Savings and Mortgage Sys-

tem of Housing Support for Servicemen

to arrange lending programs for service-

men. The “Mortgage for servicemen”

lending program has been developed

and approved.

In 2010, the Bank continued to imple-

ment special auto loan programs with

the representative offices of automobile

companies such as ROLF Import (distrib-

utor of Mitsubishi), Ford Motor Compa-

ny, KIA Motors Rus, Hyundai Motor CIS,

Porsche Financial Services Rusland and

AUTOVAZ. Partnerships were established

with the official representative offices of

Cheri, Chance and Suzuki operating in

the Russian Federation such as Cheri Au-

tomobiles Rus, QWEENGROUP (distribu-

tor of Chance) and Suzuki Motors Rus.

To improve the attractiveness of

Gazprombank’s credit cards, interest

rates were reduced in 2010 (by 2 pct.)

and maximum limits available were in-

creased (to RUR 350,000). A new credit

card-based lending program was ap-

proved for the Bank’s individual borrow-

ers who had obtained mortgage or car

purchase loans.

Gazprombank’s corporate network

of points offering E-services covers 92 re-

gions of Russia (regional, district and ma-

jor industrial centers) with more than

3,500 ATMs, more than 2,100 cash-out

points and about 15 thousand POS ter-

minals installed. The Bank’s international

cards (VISA and MasterCard branded)

ensure easy and convenient 24/7 access

to bank account funds. New premium-

grade products (VISA Infinite, MasterCard

World Signia) for VIP customers have

been launched and offered.

In 2010, Gazprombank offered its

customers a wide range of co-branded

programs:

● “Gazprombank — FC Zenit” Master-

Card settlement bank cards;

● “Gazprombank — Aeroflot” Master-

Card settlement bank cards, com-

bining an international settlement

bank card from GPB (OJSC) and an

opportunity to earn miles under

Aeroflot’s loyalty program “Aero-

flot — Bonus”;

Trends in individual account balances , RUR billion

January 1, 2010

January 1, 2011

Annual increase, %

On-demand accounts 50.6 69.6 38%

Term deposit accounts 120.0 168.8 41%

Composition of the retail loan portfolio, RUR billion

Loan Type 2009 2010 % change

Mortgage loans 55.8 65.2 17

Consumer loans 12.7 17.2 35

Car purchase loans 12.3 11.8 -4

Credit cards and overdrafts 0.5 1.7 240

CLASSIC BANkING SERvICES

30

● “Gazprombank — Gazprom Neft”

MasterCard co-branded settlement

bank cards, offering benefits at the

fueling stations of JSC Gazprom Neft;

● Co-branded bank cards issued jointly

with the Moscow Subway (CJSC Ex-

press Card).

Pension Cards were serviced in Mos-

cow and the Bank’s branches as part of

a joint project with Non-State Pension

Fund GAZFOND, and a service was im-

plemented to notify the Fund’s members

about the status of their pension ac-

counts using the Bank’s ATMs (slips

printed out by ATMs accessing the

Fund’s data base). Since the 1st quarter of

2011, the service has been offered in the

Bank’s branches.

A “Shareholder’s Card” is serviced

jointly with the Depository Center; as of

January 1, 2011, 10,300 cards had been

issued.

In cooperation with the insurance

company SOGAZ, Gazprombank card

holders are offered a package of extra in-

surance services. Since 2007, a program

offering discounts from 10 to 30% has

been offered jointly with SOGAZ for the

holders of Gazprombank’s cards.

During 2010, the Bank’s entire re-

gional network completed the imple-

mentation of a remote service system

(that can be accessed via ATMs, self-ser-

vice banking devices, and Telecard sys-

tem) to enable non-cash transactions for

card holders to pay for services provided

by the most popular telecom operators,

internet providers, commercial TV and

utility services, to repay loans obtained

from Gazprombank, to pay for shares in

mutual investment funds or contribu-

tions to charities, etc. (over 230 services

are available).

Non-cash Transactions Performed Using the Bank’s ATMs, RUR billion

60

65

70

75

80

85

90

95




33

34

35

36

37

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1.800

2006

16.5187.2

2007

22.9250.4

2008

24.7316.7

2009

28.5389.1

2010

38.2441.5

16,522,924,728,538,2

187,2250,4316,7389,1441,5

2006

6.80

2007

16.72

2008

28.22

2009

30.19

2010

41.75

187,2250,4316,7389,1441,5

2006

0.81 0.39

2007

2.281.42

2008

3.151.88

2009

3.811.94

2010

4.212.45

0.04 0.33 0.81 0.91 1.23

2009 2010

2006

44.036.3

2007

44.157.8

2008

39.242.7

2009

5.021.2

2010

14.92.4

4444,139,2

514,9

36,357,842,721,22,4

2006

51.96.3

2007

60.58.0

2008

67.99.2

2009

75.911.9

2010

75.210.5

2006

833.9

2007

948.5

2008

1,852.2

2009

1,741.1

2010

1,951.6

51,960,567,975,9

76

6,38

9,211,910,6

2006

175.1

2007

201.6

2008

127.9

2009

196.0

2010

221.9

175,1 201,6 127,9 196,0 221,9

2006 2007 2008 2009 2010

273.1 346.2 557.3 723.3 988.2

2006 2007 2008 2009 2010

44.3 68.5 96.6 81.3 95.8

2006 2007 2008 2009 2010

225.5 284.6 510.0 710.2 947.0

2006 2007 2008 2009 2010

75.9 106.7 132.6 170.6 238.4

2006 2007 2008 2009 2010

26.9 22.1 9.2 14.8 16.8

2006 2007 2008 2009 2010

21.7 19.9 7.8 9.6 10.6

2006 2007 2008 2009 2010

0.4 0.9 1.5 3.9 2.1

2006 2007 2008 2009 2010

3.9 3.3 3.6 6.9 4.7

2006 2007 2008 2009 2010

37.8 18.0 -34.4 36.4 29.6

2006 2007 2008 2009 2010

6.3 3.0 -5.5 3.1 3.7

2005

1.39.0

2006

5.410.7

2007

5.45.5

2008

37.425.6

2009

58.131.6

2010

59.225.9

2005

29.814.3

2006

82.550.5

2007

128.296.9

2008

160.6145.7

2009

186.5183.9

2010

217.1228.6

Payments Card-to-card transfers Repayment of loans

Trends in bank card transactions at merchants serviced by Gazprombank, RUR billion

60

65

70

75

80

85

90

95




33

34

35

36

37

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1.800

2006

16.5187.2

2007

22.9250.4

2008

24.7316.7

2009

28.5389.1

2010

38.2441.5

16,522,924,728,538,2

187,2250,4316,7389,1441,5

2006

6.80

2007

16.72

2008

28.22

2009

30.19

2010

41.75

187,2250,4316,7389,1441,5

2006

0.81 0.39

2007

2.281.42

2008

3.151.88

2009

3.811.94

2010

4.212.45

0.04 0.33 0.81 0.91 1.23

2009 2010

2006

44.036.3

2007

44.157.8

2008

39.242.7

2009

5.021.2

2010

14.92.4

4444,139,2

514,9

36,357,842,721,22,4

2006

51.96.3

2007

60.58.0

2008

67.99.2

2009

75.911.9

2010

75.210.5

2006

833.9

2007

948.5

2008

1,852.2

2009

1,741.1

2010

1,951.6

51,960,567,975,9

76

6,38

9,211,910,6

2006

175.1

2007

201.6

2008

127.9

2009

196.0

2010

221.9

175,1 201,6 127,9 196,0 221,9

2006 2007 2008 2009 2010

273.1 346.2 557.3 723.3 988.2

2006 2007 2008 2009 2010

44.3 68.5 96.6 81.3 95.8

2006 2007 2008 2009 2010

225.5 284.6 510.0 710.2 947.0

2006 2007 2008 2009 2010

75.9 106.7 132.6 170.6 238.4

2006 2007 2008 2009 2010

26.9 22.1 9.2 14.8 16.8

2006 2007 2008 2009 2010

21.7 19.9 7.8 9.6 10.6

2006 2007 2008 2009 2010

0.4 0.9 1.5 3.9 2.1

2006 2007 2008 2009 2010

3.9 3.3 3.6 6.9 4.7

2006 2007 2008 2009 2010

37.8 18.0 -34.4 36.4 29.6

2006 2007 2008 2009 2010

6.3 3.0 -5.5 3.1 3.7

2005

1.39.0

2006

5.410.7

2007

5.45.5

2008

37.425.6

2009

58.131.6

2010

59.225.9

2005

29.814.3

2006

82.550.5

2007

128.296.9

2008

160.6145.7

2009

186.5183.9

2010

217.1228.6


31

Private Banking and Art Banking

Private Banking

Gazprombank is one of leaders in

the Russian Private Banking industry.

Gazprombank offers high-income cus-

tomers a wide range of financial solu-

tions including both classic banking

products and capital management ser-

vices in Russia and abroad.

In April 2010, the Private Bank-

ing Unit was transformed into the

Private Banking Department (BPD).

This reorganization was a result of the

Bank’s successful business develop-

ment during recent years that gave rise

to a significant increase in the amount

of assets raised and the number of

customers served.

During the last two years, Gazprom-

bank’s Private Banking team completed

a significant effort to expand its prod-

uct and service lines and to improve

advisory processes for establishing

long-term relations with its customers

based on mutual trust. Today, recom-

mendations issued by the Banks’ cus-

tomers constitute an important part

of new customers joining the Bank

which evidences the high-quality work

by customer relations managers and

is a foundation for ensuring further

growth in 2011.

Art Banking Project

As part of its customer asset diversi-

fication strategy, the Bank continued to

provide financial and information ser-

vices in the art market in 2010, includ-

ing investments related to art, decisions

associated with the purchase or sale of

cultural valuables and their financial

valuation. The set of services offered un-

der the Art Banking Project also includes

arrangements for customers to partici-

pate in auctions, advising on laws gov-

erning the import and export of cultural

valuables, customs clearance and taxa-

tion matters, as well as arrangements

for expert examinations, insurance, and

storage of pieces of art.

Private Banking customers also have

access to analyses on various aspects of

the art market, invitations to museums

and gallery exhibitions, presentations

covering projects in the art field and par-

ticipation in art tours to the world’s lead-

ing sales exhibitions, and many other

features.

Within the project, the Bank contin-

ues to make efforts to develop public-

private partnerships in the fields of cul-

ture and infrastructure of the Russian art

market, and endeavors to create new

instruments and services.

Depository Business

Gazprombank’s Depository is one of

the oldest and largest in Russia.

The technologies developed and in-

troduced by the Bank, which are unique

across the country, ensure the uninter-

rupted functioning of one of the largest

depository networks which currently in-

cludes over 120 depository offices, from

Vladivostok to Kaliningrad and from

Arkhangelsk to Makhachkala.

A distinctive feature of Gazprom-

bank’s depository is its customer-orient-

ed design. The Depository’s customer

base, which is represented predominant-

ly by private investors, contains about

0.6 million customers including both

minority shareholders and major secu-

rities market professionals and inves-

tors. Total customer assets have reached

about 10% of the total capitalization

of the Russian equity market; about

400,000 customer transactions were ex-

ecuted in 2010.

According to the ratings published by

INFI PARTAD, as of July 1, 2010, GPB’s De-

pository ranked No.3 in Russia in terms of

the market value of securities deposited

by customers, and No.5 in terms of the

value of property controlled by the spe-

cialized depository.

CLASSIC BANkING SERvICES PRIVATE BANKING AND ART BANKING

32

The Bank’s depository was the first

custodian to provide infrastructural sup-

port to the “Affordable Housing” National

Project and, therefore, achieved a lead-

ing position in the mortgage-backed se-

curities services market per the amount

of deposited mortgages and business of

a specialized depository. GPB’s special-

ized depository controls more than 30%

of the total amount of existing mort-

gage coverage.

To optimize and improve the reliabil-

ity of transactions between the members

of Gazprombank Group and major corpo-

rate customers, the depository is taking

measures to consolidate the Group’s as-

sets in one single depository.

The produce line for the depository

is being expanded; software and tech-

nical upgrades are being implemented.

Given the fact that the Bank is currently

a major Russian custodian, such transac-

tions may allow Gazprombank to posi-

tion itself in the future as a global custo-

dian offering the highest quality services

to its customers.

In 2010, the Bank actively developed

effective operational programs for the

record-keeping system covering shares

issued by Russian issuers and derivative

instruments (depository receipts).

The work performed during the year

will allow the Bank to promptly “adjust”

operations for the depository network

and services supporting units which in-

teract with shareholders and investors at

a time when Russian issuers will enter into

a practical phase of approaching new eq-

uity markets (e.g. Asia-Pacific Region).

Assets controlled by the specialized depository (SD)

60

65

70

75

80

85

90

95




33

34

35

36

37

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1.800

2006

16.5187.2

2007

22.9250.4

2008

24.7316.7

2009

28.5389.1

2010

38.2441.5

16,522,924,728,538,2

187,2250,4316,7389,1441,5

2006

6.80

2007

16.72

2008

28.22

2009

30.19

2010

41.75

187,2250,4316,7389,1441,5

2006

0.81 0.39

2007

2.281.42

2008

3.151.88

2009

3.811.94

2010

4.212.45

0.04 0.33 0.81 0.91 1.23

2009 2010

2006

44.036.3

2007

44.157.8

2008

39.242.7

2009

5.021.2

2010

14.92.4

4444,139,2

514,9

36,357,842,721,22,4

2006

51.96.3

2007

60.58.0

2008

67.99.2

2009

75.911.9

2010

75.210.5

2006

833.9

2007

948.5

2008

1,852.2

2009

1,741.1

2010

1,951.6

51,960,567,975,9

76

6,38

9,211,910,6

2006

175.1

2007

201.6

2008

127.9

2009

196.0

2010

221.9

175,1 201,6 127,9 196,0 221,9

2006 2007 2008 2009 2010

273.1 346.2 557.3 723.3 988.2

2006 2007 2008 2009 2010

44.3 68.5 96.6 81.3 95.8

2006 2007 2008 2009 2010

225.5 284.6 510.0 710.2 947.0

2006 2007 2008 2009 2010

75.9 106.7 132.6 170.6 238.4

2006 2007 2008 2009 2010

26.9 22.1 9.2 14.8 16.8

2006 2007 2008 2009 2010

21.7 19.9 7.8 9.6 10.6

2006 2007 2008 2009 2010

0.4 0.9 1.5 3.9 2.1

2006 2007 2008 2009 2010

3.9 3.3 3.6 6.9 4.7

2006 2007 2008 2009 2010

37.8 18.0 -34.4 36.4 29.6

2006 2007 2008 2009 2010

6.3 3.0 -5.5 3.1 3.7

2005

1.39.0

2006

5.410.7

2007

5.45.5

2008

37.425.6

2009

58.131.6

2010

59.225.9

2005

29.814.3

2006

82.550.5

2007

128.296.9

2008

160.6145.7

2009

186.5183.9

2010

217.1228.6

value of assets controlled by the SD, RUR billion Share of assets controlled by the SD of the total amount of deposited mortgages, %

Transactions in mortgages held in custody

60

65

70

75

80

85

90

95




33

34

35

36

37

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1.800

2006

16.5187.2

2007

22.9250.4

2008

24.7316.7

2009

28.5389.1

2010

38.2441.5

16,522,924,728,538,2

187,2250,4316,7389,1441,5

2006

6.80

2007

16.72

2008

28.22

2009

30.19

2010

41.75

187,2250,4316,7389,1441,5

2006

0.81 0.39

2007

2.281.42

2008

3.151.88

2009

3.811.94

2010

4.212.45

0.04 0.33 0.81 0.91 1.23

2009 2010

2006

44.036.3

2007

44.157.8

2008

39.242.7

2009

5.021.2

2010

14.92.4

4444,139,2

514,9

36,357,842,721,22,4

2006

51.96.3

2007

60.58.0

2008

67.99.2

2009

75.911.9

2010

75.210.5

2006

833.9

2007

948.5

2008

1,852.2

2009

1,741.1

2010

1,951.6

51,960,567,975,9

76

6,38

9,211,910,6

2006

175.1

2007

201.6

2008

127.9

2009

196.0

2010

221.9

175,1 201,6 127,9 196,0 221,9

2006 2007 2008 2009 2010

273.1 346.2 557.3 723.3 988.2

2006 2007 2008 2009 2010

44.3 68.5 96.6 81.3 95.8

2006 2007 2008 2009 2010

225.5 284.6 510.0 710.2 947.0

2006 2007 2008 2009 2010

75.9 106.7 132.6 170.6 238.4

2006 2007 2008 2009 2010

26.9 22.1 9.2 14.8 16.8

2006 2007 2008 2009 2010

21.7 19.9 7.8 9.6 10.6

2006 2007 2008 2009 2010

0.4 0.9 1.5 3.9 2.1

2006 2007 2008 2009 2010

3.9 3.3 3.6 6.9 4.7

2006 2007 2008 2009 2010

37.8 18.0 -34.4 36.4 29.6

2006 2007 2008 2009 2010

6.3 3.0 -5.5 3.1 3.7

2005

1.39.0

2006

5.410.7

2007

5.45.5

2008

37.425.6

2009

58.131.6

2010

59.225.9

2005

29.814.3

2006

82.550.5

2007

128.296.9

2008

160.6145.7

2009

186.5183.9

2010

217.1228.6

Total amount of mortgages in safekeeping, RUR billion Total number of mortgages accepted for safekeeping, thousands


33

Investment Banking

Financial Market Transactions

Providing services to corporate cus-

tomers in financial markets remains one

of Gazprombank›s top-priority business

areas. In 2010, the Bank continued to

develop its customer-oriented business

model offering its customers the widest

possible range of services.

Throughout the year, the Bank ex-

ecuted about 300 long-term framework

agreements with its customers for fi-

nancial market transactions, including

260 agreements associated with plac-

ing temporary surplus money as de-

posits to minimum-balance settlement

accounts.

During the year, the Bank actively

participated in tenders designed to al-

locate temporary surplus funds for gov-

ernment-owned corporations and com-

panies included in the register of natural

monopolies, including State Atomic En-

ergy Corporation ROSATOM, RUSNANO,

GC Olympstroy, GCK Housing and Pub-

lic Utilities Reformation Support Fund,

Russian Railways, OJSC Russian Venture

Company and others.

During the reporting year, the mar-

ket risk hedging business was devel-

oped for corporate customers using de-

rivative financial instruments associated

with FX markets, both interest rates and

commodity prices.

In 2010, Gazprombank main-

tained its leading positions among the

Top-3 arrangers of customer loans in the

debt market by ensuring the placement

of 24 issues of bonds at MICEX with a to-

tal face value exceeding RUR 200 billion;

Gazprombank completed a number

of benchmark transactions including:

● RUR 50 billion offering of 30-year

bonds (issued by Federal Grid Com-

pany of United Energy System);

● large-scale market offering of 7-year

bonds with fixed coupon (issued by

RUSNANO);

● large-scale market offering of 2-tier

bonds (bonds issued by MTS);

● IPO of foreign government 2-year

bonds at MICEX (8.7% bonds is-

sued by the Republic of Belarus

government for a total amount of

RUR 7 billion);

● IPO of Ruble-denominated 5-year

corporate Eurobonds in international

markets (7.785% bonds issued by

JSC RusHydro for a total amount of

RUR 20 billion). This transaction was

recognized as the best bond offering

of 2010 on Central and Eastern Euro-

pean markets by EMEA Finance.

In 2010, the Bank developed (and

registered with the Federal Financial

Markets Service) documentation for

issuing insurance company bonds and

infrastructural bonds for road construc-

tion projects under concession agree-

ments; a technique was worked through

for offering corporate bonds via quota-

tion lists “A1” and “B” and issuing a place-

ment report without requiring the is-

suer’s approval and registration with the

Federal Financial Market Service.

During the reporting year, Gazprom-

bank significantly increased the volume

of its own fixed income security transac-

tions. The Bank Treasury’s trade portfolio of

debt securities was created primarily with

investments in short-term and mid-term

assets characterized by high-level credit

quality. Starting in the second half of 2010,

the volumes of equity and debt securi-

ties transactions performed in the REPO

market noticeable increased. Completed

transactions enabled the investment of

temporary surplus funds and regulation of

imbalances in depository accounts occur-

ring during day-to-day operations. In par-

ticular, due to the introduction of a new

banking product, i.e. floating rate repos

with interim interest payments, the Bank

had a significant liquidity reserve.

In 2010, Gazprombank raised financ-

ing in Russian and international public

debt capital markets for a total amount of

USD 1.9 billion and RUR 10 billion.

INvESTMENT BANkING

34

After a break due to the international

financial crisis, Gazprombank successful-

ly placed an issue of 6.25% Eurobonds in

international financial markets for a total

amount of USD 1 billion maturing in De-

cember 2014.

In September 2010, the Bank raised

a syndicated loan from an associa-

tion of 12 major international banks

for a total amount of USD 900 million

for 3 years at an interest rate equal to

LIBOR + 2.5% p.a. This loan became

the largest syndicated loan raised by

Gazprombank in the international fi-

nancial market.

In December 2010, the Bank placed

a debut issue of 7.75% BO-1 series ex-

change-traded Ruble-denominated

3-year bonds in the Russian market for

a total amount of RUR 10 billion.

During the year, the Bank punctually

redeemed three issues of Eurobonds:

a RUR 10 billion issue of Ruble-denom-

inated Eurobonds, a USD 700 million is-

sue of USD-denominated floating rate

Eurobonds, and a CHF 500 million issue

of CHF-denominated Eurobonds.

Project and Structured Finance

Gazprombank holds one of the lead-

ing positions in the Russian project and

structured finance market.

THE BANK›S LOAN PORTFOLIO FOR PROJECT AND STRUCTURED FINANCING EXCEEDED RUR 250 BILLION AT YEAR-END 2010.

In 2010, the diversification of the

Bank’s customer base across different in-

dustries and portfolio of financed projects

increased its share of agricultural projects

(+5%), transportation (+2%) and com-

munications (+0.4%). At the same time,

the share of projects related to machine-

building and metallurgy was reduced

while the oil sector increased to 28%.

In partnership with foreign banks

and export credit agencies, the Bank im-

plemented transactions to finance:

● OAO Chelyabinsk Metallurgic Plant

(Mechel Group) for a total amount

of USD 219.4 with funds raised from

EximBank (China) with ECA coverage

(SINOSURE) (“Transaction of the Year

2010” according to Trade Finance

Magazine);

● a project to construct a gas process-

ing plant at the Prirazlomnoye field

initiated by CJSC Ob’ GasProcessing

(Roza Mira Group) for a total amount

of USD 48.2 million with funds raised

from Export Canada;

● construction of the DSP-120 metal-

lurgic complex as part of the efforts

to upgrade the metallurgic facilities

of OMZ-Special Steels, which in-

ter alia involved raising funds from

Landesbank Berlin.

The Bank started to finance a pro-

ject to develop the Yuzhno-Mechetkin-

skoye oil and gas field in the Saratov

region (ZAO Geotex). Within the efforts

to finance leasing projects initiated by

JSC Gazprombank Leasing, projects were

implemented to purchase railway cars for

JSCo. Novotrans-Holding and tank con-

tainers for TANK YARD Group, as well as

equipment and specialized machinery for

a project to upgrade the Pervomayskaya

CHP for OJSC Schekinoazot. The Bank,

with the involvement of JSC Gazprom-

bank Leasing, paid for drilling equipment

supplied to ERIELL GROUP on a project

finance basis. In 2010, ERIELL GROUP in-

creased its volume of Russian equipment

purchases by entering into a supplies

contract providing for the delivery of ten

drilling units manufactured by JSC Ural-

mash Plant in 2010-2012.

The amount of long-term loan re-

sources extended by the Bank to its

agro-industrial customers totaled

RUR 16 billion as of year-end. In addition

to new projects, the Bank continued to

finance current projects, providing loans

to such major companies as Znamen-

sky GSC, Agro-industrial holding EXIMA,

Svinokompleks Uralsky (JSC Siberian

Agrarian Group) and OJSC Lipetskmya-

soprom (Cherkizovo Group).

As part of implementing the statutory

measures initiated to support the Russian

Federation financial system and to raise

subordinated loans from VEB, the Bank con-

tinued to finance the top-priority sectors of

economy, in particular, machine-building,


35

aero-space, residential construction, metal-

lurgical, transportation and leasing com-

panies (related to domestic machinery

purchases) and expanded the volume of

finance provided to agricultural projects.

In 2010, the Bank continued to

finance current projects such as

OOO Serebriansky Cement Plant,

OMZ Special Steels, CJSC DZGI (construc-

tion of a gas concrete plant), OJSC Karase-

jeozersk-2 (construction of a cottage vil-

lage in Yekaterinburg) and continued to

implement real estate projects in partner-

ship with the GPBI group of companies.

In the field of structured financing,

in 2010, the Bank significantly expanded

its products line including lending col-

lateralized by shares, financing corporate

acquisitions and transactions in financial

derivatives and financing of projects de-

signed to create new facilities.

During 2010, as part of its strategic part-

nership with Gazprom Group, the Bank act-

ed as a financial adviser for the Sakhalin-2

strategic project , the Shtokman field de-

velopment, and various projects connected

with constructing underground gas stor-

age in Europe (Gazprom Export).

In connection with a project initi-

ated by LLC SIBUR-Portenergo, the Bank

signed a mandate and provided finan-

cial advisory services related to the con-

struction of a Liquefied Hydrocarbon

Gases (LHCG) transshipment facility in

Ust-Luga sea merchant port in the Kingi-

sepp municipal district.

The Bank, jointly with Deutsche

Bank AG, successfully provided advisory

services to OAO Glavnaya Doroga for

their project New Access to the Moscow

Ring Road from Motor Road М1 “Belarus”

Moscow-Minsk.

Mandates were signed to provide fi-

nancing advisory services for the follow-

ing projects:

● Development of the Omsk Central

Airport area and construction of the

Omsk-Feodorvka airport;

● Construction of a mini-thermal

power plant for internal use by

ZAO Shtark, a member of PJSC Om-

skshina, SIBUR’s tyre-manufacturing

division;

● Construct ion of a tol l road

SHALI (М-7) — BAVLI (М-5) to develop

a new route of the Kazan-Orenburg

federal motor road in the Republic of

Tatarstan;

The Bank also executed partnership

agreements with:

● state company Russian Highways —

to provide financial advisory services

for projects designed to develop

road infrastructure in Russia;

● PPP Center of Vnesheconombank —

for joint participation in infrastruc-

ture projects implemented on a PPP

basis.

During 2010, Gazprombank par-

ticipated in industry seminars and

conferences and provided informa-

tional support to the meetings of

Most Significant Projects 2010

Project Description Bank's Role in the Project

Total Amount of Financing

Eriell Holding Financing the purchase of drilling and auxiliary equipment in order to execute drilling contracts in the Russian Federation, Libya, and the Republics of Kazakhstan and Turkmenistan. Arranger, lender USD 415 million

Chelyabinsk Metallurgical Plant

Financing the construction of a 1.1 million ton rail and structural steel mill

Co-arranger, lender USD 219.4 million

JSC Uralmash Plant Financing an investment program for upgrading production facilities Arranger, lender RUR 5.9 billion

OAO Gazprom Space Systems

Financing a project to create and launch the space complex Yamal-401 Arranger, lender RUR 4.6 billion

Svinokompleks Kalinovsky (Miratorg Group)

Financing of a project to construct pig farms in the Belgorod region Arranger, lender RUR 3.9 billion

JSCo. Novotrans-Holding Financing the construction of railway-car repair facilities in Irkutsk and Prokopievsk and financing the purchase of railway cars by providing funds to OAO Gazprombank Leasing Arranger, lender RUR 3.2 billion

INvESTMENT BANkING PROJECT AND STRUCTURED FINANCE

36

Intergovernmental Committees such as

the Intergovernmental Commission for

Economic, Industrial and Scientific-Tech-

nical Cooperation between Russia and

Czech Republic.

The Bank’s specialists participate in

the development and expert examina-

tion of draft laws on project and struc-

tured finance and PPPs, and provide

support as representatives of agent

banks to government contracts. The

Bank’s customers are offered a full range

of advisory, methodological and practi-

cal assistance for matters related to ar-

ranging, structuring and financing in-

vestment projects.

The main objectives for develop-

ing project and structured financing in

2011-2012 are:

● expand partnerships with custom-

ers, including Gazprom Group, par-

ticularly in financial advisory services

provided for arranging large-scale

project financing;

● implement infrastructure projects

(including PPP based) to leverage

the Bank’s strong position in that

segment;

● strengthen the leading position of

the Bank in developing mid-size

and major enterprises in the Russian

Federation;

● develop and introduce new struc-

tured banking products, and expand

the Bank’s investment product lines

in project and structured financing.

Mergers and Acquisition Advisory Service


the M&A market in Russia. According

to ThomsonReuters, in 2010, Gazprom-

bank was among the leaders in provid-

ing M&A advisory services in terms of

completed transactions for two straight

years, which demonstrates the consist-

ency of results.

The following are the most sig-

nificant transactions completed by

Gazprombank in 2010:

● Acquisition by OOO Yamal Razvitiye

( joint project with OAO NOVATEK

and JSC Gazprom Neft) of a control-

ling stake in LLC SeverEnergia, con-

trolling the development of an oil &

gas condensate field in the Yamalo-

Nenets Autonomous District of the

Russian Federation with total hydro-

carbon reserves exceeding 1.5 bil-

lion TOE. The price of the transaction

was RUR 48.7 billion. Furthermore,

51% of receivables payable by LLC

SeverEnergia were purchased under

a RUR 7.5 billion shareholder loan

agreement.

● Sale of a controlling stake in Beleg-

gingsmaatschappij Lemore BV, one

of the largest distributors of medi-

cal items in Russia and CIS-countries

with USD 366.7 million in total pay-

outs from 2008 to 2010.

Traditionally, one of Gazprom-

bank’s most important business areas is

investment banking services for oil and

gas companies, including advising on

M&A matters and asset management as

well as a company’s own investments in

the sector.

D u r i n g 2 0 1 0 , G a z p ro m b a n k

continued to actively partner with

OAO Gazprom and its subsidiaries, pro-

viding investment and financial advi-

sory services for international transac-

tions which, among others, included

the acquisition by Gazprom Germany

of a 5.26% stake in VNG, a German gas-

distributing company from GdF Suez.

Gazprombank also provided services to

Gazprom Group in connection with the

sale of the Group’s service companies as

well as investment advisory services to

Gazprombank’s customers for projects

related to the export logistics of oil and

oil products.

OAO NOVATEK contracted the

Bank’s specialists to receive advice on

the selection of international partners

for a project to create a LNG (liquefied

natural gas) production center on the

Yamal peninsula to process gas reserves

from the Yuzhno-Tambeyskoye field.

At the same time, Gazprombank

continued to successfully offer its

M&A advisory services to clients in

other industries and the services sector,

being the exclusive advisor for custom-

ers in the power system, coal-mining,

agriculture, retail and wholesale trade,

hi-tech, telecommunications, insur-

ance and banking industries. Custom-

ers are advised on attracting investors,


37

acquiring and selling businesses, merg-

ing companies, creating JVs and ex-

changing blocks of shares. In early 2011,

the Bank served as an adviser to ap-

proximately 20 planned M&A transac-

tion, a number of which are expected

to close as early as this year.

The recovery of investor activ-

ity in the M&A market in 2010 raises

expectations for a good level of growth

in the advisory business in 2011-2012.

Gazprombank considers this business

segment to be one of the most impor-

tant business lines in the coming years.

In 2010, the Bank began to actively

develop its merchant banking (invest-

ment of its own capital in minority in-

terests of non-public companies) In

the absence of a significant number

of major foreign players in the area,

Gazprombank plans to take up key po-

sitions in that promising market. The

Bank’s unique position in the Russian

market and its comprehensive range

of financial products and services will

make it an attractive partner for many

successful companies.

Structured and Syndicated Finance

In 2010, Gazprombank implemented

a number of projects to finance acquisi-

tions and provide financing against a

pledge of blocks of shares in strategic

companies. An outstanding feature of

the projects was the innovation in the

transactional structures developed by

the Bank that allowed proposed business

ideas to be implemented in the shortest

possible time and in line with applicable

laws and regulatory limitations.

An example of such work was

the completed transaction for a cus-

tomer in which the Bank financed the

acquisition of over 258.5 million (9.4%)

ordinary shares in OAO NOVATEK. The

loan portion of the transaction was

RUR 55 billion.

In the syndicated loan market in

2010, the Bank acted as an arranger

and participated in the syndication of

four loans for companies from Russia

and other CIS countries. The syndicat-

ed loans totaled RUR 5.2 billion which

earned RUR 74.1 million in fees. One

of the largest transactions involved

a financing in Indian rupees (equiva-

lent to USD 200 million) for Sistema

Shyam Teleservices Limited, an Indian

subsidiary of JSFC Sistema. Accord-

ingly, a mandate letter was signed

between Gazprombank and Sistema

Shyam Teleservices Limited during the

events surrounding the opening of

Gazprombank’s Representative Office

in New Delhi in the presence of the

Vice Premier of the Russian Federation,

Mr. Sergey B. Ivanov.

A number of projects implemented

during 2010 laid a good foundation for

increasing business volumes in 2011 and

in the years to come.

INvESTMENT BANkING

38

Trust Management


the Russian trust management busi-

ness. Today, based on data from Expert

RA, Gazprombank’s asset management

business ranked No.2 in 2010, with more

than RUR 150 billion under manage-

ment. In 2010, thanks to professional

management skills, market growth

and an increasing customer base, the

amount of assets under management

increased by RUR 50 billion.

The unique combination of the

Bank’s capabilities with those of manage-

ment companies in Russia and Luxem-

burg enables the creation of the widest

possible range of investment products

meeting the investment management

requirements for various types of Russian

and foreign customers. Such services in-

clude mutual funds, bank-managed mu-

tual funds, international investment prod-

ucts, and services of the wholly-owned

management company subsidiary, GPB

Asset Management, in Luxemburg. Cur-

rently, our clients are offered a range of

26 funds featuring an optimal combina-

tion of risk exposure and profitability.

Competitive returns were achieved

for investment products in each catego-

ry of risk exposure during the year. Thus,

the Gazprombank-Shares, Gazprom-

bank-Elektroenergetika and Gazprom-

bank-MICEX Index mutual funds were

among the best 25% of funds in Russia

in terms of profitability.

The Bank’s corporate segment also

achieved significant results: Gazprom-

bank-Telecommunications, a closed-end

investment fund, was created for the

subsidiaries of Sviazinvest to become

the first in Russia to implement an op-

tion program for top managers.

Following current market trends,

Gazprombank interacts with new

industries by participating in and win-

ning tenders held to select trust man-

agers for endowment funds or target

capital funds. The funds of Skolkovo

and Tomsk Polytechnic University have

joined major Russian funds such as De-

velopment Funds of MGIMO, Saint Pe-

tersburg State University and Tyumen

State University which have entrusted

their funds to Gazprombank.

In 2010, MC Gazprombank-Asset

Management became a private inves-

tor favorite among major management

companies. Thus, Gazprombank-Fund of

Developing Sectors and Gazprombank-

Elektroenergetika were among the top-

20 funds in terms of the amount of funds

drawn to openend investment funds.

Their customer base has also grown: the

number of registered personal accounts

has reached 9,500, which is 90% higher

than in 2009.


39

Management of Non-Financial Assets

Oil and Gas Sector

In November 2010, Gazprombank

completed a transaction to sell its 51%

shareholding in OAO Sibneftegaz en-

gaged in the production of gas in the

Yamalo-Nenets Autonomous District to

a third party.

The 51% stake in OAO Sibneft-

egaz was purchased by Gazprombank

Group in 2006. While holding the

stake, the Group financed OAO Sibneft-

egaz’s investment programs aimed at

developing the following four fields:

Beregovoye, Puireynoye, Khaduirkhin-

skoye and Zapadno-Zapoliarnoye. Two

fields, Beregovoye (in 2007) and Puirey-

noye (in 2009), were put into industrial

operation with their aggregate yearly

production output totaling about

11 billion cubic metres of gas. Geologi-

cal exploration work is underway at the

two other fields.

The price of the transaction designed

to sell the 51% stake in OAO Sibneftegaz

was RUR 25.6 billion and revenues from

the transaction totaled RUR 23.9 bil-

lion. OAO Sibneftegaz has also repaid all

loans made available to it earlier.

Gold-mining Industry

As a result of restructuring part of

Gazprombank’s loan and redeeming the

bonds issued by Angara Mining Plc. in

September 2010, Gazprombank Group

acquired a 62.5% share of the authorized

capital of ZAO Vasilievsky Rudnik.

ZAO Vasilievsky Rudnik deals with

the exploration and production of gold

ore within the Partizansky Ore Cluster of

the Motiginsky region in the Krasnoyarsk

Territory. Its production facilities include

a functioning 350,000 t.p.a. gold extrac-

tion plant, more than 80 units of pro-

duction machinery, power-generation

capacity and necessary related infra-

structure. Its gold output was 1,082 kg

in 2010.

As part of its strategy aimed at de-

veloping the gold ore business area,

Gazprombank Group is actively partici-

pating in the management and devel-

opment of ZAO Vasilievsky Rudnik. Cur-

rently, a project is being implemented

to construct a heap leaching string for

processing ore from the Arkhangelsk

field. Efforts are underway to protect the

reserves of the promising Gerfed field.

Concurrently, steps are being taken to

enhance the company’s efficiency by

improving its personnel list, introduc-

ing incentive programs for key manage-

ment personnel, introducing automa-

tion systems, engaging contractors for

mining work and improving the quality

of production, managerial and financial

reports.

As part of developing its mineral

and raw material base, in early 2011,

ZAO Vasilievsky Rudnik was announced

the winner of a tender held to select the

licensee for such promising areas as Za-

padnaya, Mitrofanovskaya and Ilyinsko-

Talovskay, and won an auction held to

license the Sergeyevsky plot. These ar-

eas are in close proximity to the produc-

tion facilities of ZAO Vasilievsky Rudnik,

which will ensure quick access to begin

their development.

Gazprombank is actively financing

the development of ZAO Vasilievsky

Rudnik with total opened credit facilities

exceeding USD 25 million.

Petrochemistry

On December 23, 2010, Gazprom-

bank Group entered into a share sale

agreement to sell 25% of its shares in

CJSC SIBUR Holding. The approval of

antitrust bodies for the purchase of the

block of shares in CJSC SIBUR Holding by

the buyer was obtained in March 2011.

The sale of the above mentioned block

of shares in CJSC SIBUR Holding has re-

sulted in Gazprombank Group having

lost control over CJSC SIBUR Holding. In

this connection, the financial indicators

SIBUR Holding group are no longer con-

solidated in Gazprombank Group’s finan-

cial statements. Furthermore, in Decem-

ber 2010, Gazprombank Group agreed

on conditions of the future sale of the

remaining share in CJSC SIBUR Holding.

Such transaction will also require an the

approval of antitrust bodies as well as

a consent of the Government Commit-

tee for Monitoring Foreign Investments

into Strategic Sectors. In this connection,

the Group has classified its remaining

45% nominal share in SIBUR Holding

group actually owned as of January 01,

2011 as an investment into an associ-

ated company held for sale.

Machine-Building

Being an active participant in govern-

ment initiatives to develop the national

economy, and relying on real experi-

ence in managing large-scale indus-

trial assets, Gazprombank ensured the

overall development of Gazprombank

Group’s machine-building enterprises in

2010, being of strategic importance for

the Russian economy in addition to per-

forming main tasks in the financial area.

INvESTMENT BANkING

40

Thanks to the mobilization of its own

financial and managerial resources, sup-

port from its leading shareholders and

customers as well as the proper coordi-

nation with federal executive authorities,

Gazprombank has succeeded in achiev-

ing certain positive results in the area of

recovery and development of machine-

building enterprises.

With the assistance of Gazprombank,

the Group’s machine-building enter-

prises have successfully mastered new

product manufacturing which is strate-

gically important for both business de-

velopment and the petrochemical sec-

tor of the Russian Federation in general.

In particular, during the course of 2010,

the Ural Industrial Site resumed pro-

duction of complete drilling units and

successfully delivered the first samples

of its equipment to OJSC Oil Company

Rosneft and OJSC Gazprom Neft. As a re-

sult, the amount of contracts executed

in that area has increased by more than

20 times over the previous year. It is

the first time in the history of the Rus-

sian machine-building industry that the

Izhora Industrial Site has manufactured

and supplied two unique supersized

hydrocracker units weighing more than

1,200 tons each. Also, it is the first time

in the history of the national industry

that OAO Uralkhimmash has mastered

the manufacturing of tank containers

designed for transporting liquefied gas

kept at up to minus 50°С.

The engineering and structural po-

tential of companies has been strength-

ened. The manufacturing of unique

products to replace imported ones (e.g.

sliding shutters for trunk pipelines) has

been mastered based on domestic engi-

neering capacities.

The Bank has ensured the imple-

mentation of large-scale innovative

investment programs aimed at devel-

oping the production and process ca-

pabilities in line with the requirements

of the market and government target

programs.

A significant increase in production

output and sales has been achieved

due to a return to traditional sales mar-

kets, the introduction of new products

types in the markets, and inclusion of

Gazprombank’s customers in the list of

clients.

Another top-priority business area for

Gazprombank per its approved develop-

ment strategy is investment activity. In

2010, with the assistance of Gazprom-

bank, a share in ZAO REP Holding, one

of the leading national producers of in-

dustrial gas turbines and gas compres-

sor units, was purchased. This will further

diversify the markets in which Gazprom-

bank is present and significantly expand

the range of products offered by energy-

related machine-building enterprises.

In 2010, Gazprombank Group also

completed the sale of its minority in-

terest in Machine-Building Factory of

Podolsk, its 100% share in the Czech

machine-building company Pilsen Steel

s.r.o. (member of OMZ Group) and the

100% share in OAO ORMETO-YUMZ held

by ZAO MK Uralmash, a joint-venture

company between Gazprombank Group

and Metalloinvest Holding. As a re-

sult of the last transaction mentioned,

ORMETO-YUMZ has ceased to exist and

Gazprombank Group has become the

holder of the 100% share in ZAO MK

Uralmash.

Construction and Engineering

One of the top-priority investment

areas for Gazprombank Group is the

construction and engineering segment

in oil & gas, energy and infrastructural

areas. Favorable market conditions and

long-term growth prospects in the key

sectors demanding construction and

engineering services associated, among

other things, with the implementation

of large-scale projects to upgrade the

national infrastructure make this sector

especially attractive.

An important investment for

Gazprombank Group in this area is

JSC South center of power engineer-

ing (JSC SCPE), a multi-field engineering

company offering packaged services

in connection with the construction of

power assets. In 2010, the Bank approved

the “Long-Term SCPE Development Plan

through 2015” which contemplates the

transformation of the company’s busi-

ness model into an EPC-contractor fo-

cusing on the implementation of large-

scale turn-key projects.

In 2010, the company continued to

show stable growth by contracting with

the facilities of the Kalinin NPP (its largest

scope of work to date). Furthermore, the

SCPE became a member of a consortium

with OJSC Stroytransgaz and JSC Federal

Grid Company of Unified Enetgy System

to take part in a large-scale construction

program relating to the network facilities

of JSC FGC UES.

Power Sector

In accordance with its approved

strategy for electric power assets and

given the total recovery of equity mar-

kets during 2010, Gazprombank has sold

its minority interests in JSC OGK-1 and

JSC OGK-6. The proceeds from these

sales totaled about RUR 1.2 billion.

In 2010, Gazprombank acquired

a 100% share in Centrex Europe Energy

& Gas AG (Centrex). The companies be-

longing to Centrex group supply and

store gas in underground storage in


41

European countries and produce gas

in Middle Asia. Centrex’s development

strategy aims at strengthening partner-

ships with key gas consumers and sup-

pliers, and at purposefully developing its

retail gas business in European countries.

Infrastructure

During the year under review, the

Bank continued to implement its invest-

ment initiatives in Russia’s infrastructural

sector. One of the major projects in which

the Bank continues to structure its partici-

pation as lender and investor, is the con-

struction of an oil product transshipment

terminal in the North-Western region of

the Russian Federation. It is expected that

the final documents for this transaction

will be signed in the first half of 2011.

The continued development and

increase of investments in Russia’s infra-

structure sector is one of the most im-

portant areas of Gazprombank’s invest-

ment business development strategy. In

2011, Gazprombank will continue to ac-

tively search for attractive infrastructure

projects which can leverage other assets

owned by the Bank.

Energy Efficiency

In supporting initiatives to improve

the energy efficiency (EE) of the Russian

economy, Gazprombank actively works

across a wide range of areas and con-

tinues to actively develop its business in

this field.

In 2010, Gazprombank and the

Russian and German Energy Agency

(RUDEA) executed a partnership agree-

ment contemplating the development

and implementation of mechanisms

to arrange financing for projects in

the EE area. Moreover, Gazprombank

has acquired 30% of the authorized

capital of RUDEA.

To date, most EE projects by

Gazprombank and RUDEA are being

implemented in the Ural Federal district

and are actively supported by the admin-

istrations of the corresponding districts

and regions. In particular, Gazprombank,

is jointly financing a project with the

German Energy Agency DENA to de-

velop a model for upgrading the street

lighting system of Yekaterinburg, and its

results will be used to implement similar

projects in the future.

Projects have been started at

OJSC Uralmash, JSC Uralmash Plant and

OJSC Izhora plants as part of the pro-

gram to improve the energy efficiency

of Gazprombank Group’s industrial en-

terprises. To implement these projects,

Gazprombank is actively contracting

with both Russian and foreign technical

experts.

The creation of an internal energy ser-

vice company in 2010 was a key step in

developing Gazprombank’s EE business.

The company is Gazprombank’s main

tool for implementing EE projects under

energy service contracts in accordance

with Federal Law No.261-FZ “On Energy

Conservation and Energy Efficiency Im-

provement and Amendment of Individ-

ual Legislative Instruments of the Rus-

sian Federation”.

Media, Telecom, Internet and Hi-Tech

In 2010, the television broadcast-

ers NTV and TNT (which are members

of Gazprom-Media Holding owned by

Gazprombank Group) succeeded in

strengthening their leading positions

in the Russian television market. The

NTV channel is steadily among the top

three Russian TV channels in terms of

audience and regularly outperforms its

main competitors by ratings covering

both Moscow and the whole territory of

Russia. The TNT channel holds a leading

position among the country’s economi-

cally active population and is among the

channels that are most highly rated by

advertisers.

Net By Net, a high-speed Internet

service provider (which Gazprombank

holds a share in) continues to increase

its share in the Moscow and Moscow

regional markets. In 2010, it success-

fully expanded its network in the Cen-

tral Federal District of the Russian Fed-

eration. The company’s subscriber base

has reached 400,000 subscribers which

makes it one of the largest national

operators.

NATIONAL TELECOMMUNICATIONS

(OAO NTK — which Gazprombank holds

a share in) has strengthen its leading

position in the social and paid TV mar-

ket and the high-speed internet service

market covering Moscow and Saint-

Petersburg by increasing its subscriber

base to 4.8 million people and recording

record high profits.

Morion, a member of Gazprombank

Group and the world’s leader in manu-

facturing high precision frequency selec-

tion and stabilization devices, reached

its highest level of sales ever, and its in-

come statement show that operations

were absolutely profitable in 2010.

INvESTMENT BANkING MANAGEMENT OF NON-FINANCIAL ASSETS

42

Risk Management

Risk Management Framework

The Bank manages its risks centrally

to ensure uniform risk assessment and

control principles for GPB Group in gen-

eral, and facilitates the improvement of

software and technology used.

THE BANK DIVIDES ITS MAIN RISKS FROM COMPANY ACTIVITIES INTO THREE CATEGORIES: BUSINESS, ECONOMIC AND OPERATIONAL RISKS.

Business risks are associated with the

making of strategic decisions concern-

ing business development. Business

risks (including assessment, analysis and

mitigation-related matters) are managed

during the development of business

strategies and their management is re-

served to the Bank’s Management Board

and Board of Directors.

Economic risks are assumed by the

Bank in the ordinary course of business

purposefully for generating relevant in-

come and are subdivided into credit,

market and liquidity risks.

Operational risks arise as an inevitable

component of business and are mitigat-

ed directly by subdivisions owning them

along with high-level coordination by

the Risk Management Block.

The assessment and analysis func-

tions for economic and operational

risks are held by the Risk Manage-

ment Block managed by a responsible

member of the Management Board

(Chief Risk Officer). Economic and op-

erational risks are managed by special

management bodies (committees)

which have individual decision-mak-

ing authority.

Risk appetite is measured using a sys-

tem of indicators limiting the total risk

level and structure of accepted risks

with respect to individual transactions

and portfolios. The actual levels of risk

are monitored on a quarterly basis and

reviewed by the Management Board in

accordance with its meeting plan.

Risk factors that affect the Bank are

classified as systemic and individual

factors.

Systemic factors that give rise to a set

of risks and are able to exert a significant

influence on the Bank are taken into ac-

count during strategic planning and in

crisis management procedures (stress-

testing, emergency planning, continuity

of operations).

Individual factors and risks relating

to them are connected with certain

transactions, instruments and coun-

terparties are considered by the Bank

within established procedures (includ-

ing preliminary and follow up analysis,

assessment, monitoring, etc.).

Credit risk is managed in accord-

ance with the regulations by the Bank

of Russia, principles and guidelines

developed by the Basel Committee on

Banking Supervision, and the Bank’s in-

ternal policies which take into account

these principles. The Credit Policy and

Risk Management Policy are the main

documents determining the principles,

mechanisms and processes for manag-

ing credit risk.

THE UNIFORMITY OF RISK ASSESSMENT RESULTS WHEN MAKING CREDIT DECISIONS, GOVERNINIG AND MONITORING RISK, AND MAKING PROVISIONS, IS A FUNDAMENTAL PRINCIPLE FOR MANAGING CREDIT RISK.

The credit risk management system

comprises measurement of credit risk on

a case-by-case (expert review of individ-

ual transactions) and portfolio (assess-

ment of risk concentration) approaches.


43

Credit risk is measured using qualitative

(expert) and quantitative (statistical)

measurements.

Qualitative measurement of credit risk

is the main tool for measuring credit risk

and is made in terms of and is performed

for individual groups of transactions. The

results of qualitative measurements of

credit risk are used by the Bank’s com-

mittees when deciding whether or not

to accept credit risk, assessing the con-

centration of major credit risks and

setting minimum requirements for

a particular transaction.

The quantitative measurement of

credit risk is developed taking into ac-

count the recommendations issued

by the Basel Committee on Banking

GPB Group’s Risk Management Framework

BOARD OF DIRECTORS OF GPB (OJSC)

MANAGEMENT BOARD OF GPB (OJSC)

COMMITTEES

RISk MANAGEMENT BLOCk OF GPB GROUP

RISk MANAGEMENT OF GPB (OJSC)

Risks of GPB (OJSC)

RISk MANAGEMENT OF GPB GROUP

Risks of industrial companies of GPB Group

Risk management units of subsidiary banks

Risks of subsidiary banks

GPB (OJSC) logically coordinates and monitors risk exposures of its subsidiary banks

Each subsidiary bank has a unit performing risk management functions

• business risks• economic risks

• operational risks

• business risks• economic risks

• operational risks

Risk exposures of industrial companies are managed on an aggregated level through the integrated assessment of

investment depreciation risks

RISk MANAGEMENT RISK MANAGEMENT FRAMEWORK

44

Supervision and best international bank-

ing practice.

The Bank is one of the participants

in a project being implemented by the

Bank of Russia to realize the principles

contemplated by the Basel Agreement

within the Russian banking practice.

For this purpose, the Bank is currently

independently creating a methodologi-

cal and technological framework to en-

able a staged transition to the Basel II

methodology.

For the purposes of implementing

the principles set by the Basel Com-

mittee on Banking Supervision, the

Bank in 2010 developed and began

implementing a project to automate

GPB’s integrated risk management sys-

tem for improving the quality of risk

tolerance and capital requirements as-

sessments, to introduce economically

reasonable pricing models, and to use

a proactive approach in managing

credit risks based on a combination of

expert estimates, models, forecasts and

other methods.

In 2010, the Bank developed and

introduced a system of indicative addi-

tions/discounts for the threshold inter-

est rates applicable to loans extended to

corporate borrowers, as well as a tech-

nique for building conservative scenar-

ios, given the crisis events occurring in

the concerned sectors.

The list and parameters for standard

retail lending programs were optimized

given the existing economic conditions

and efficiency analysis. Score cards were

developed for a number of retail lend-

ing areas (consumer and auto loans)

based on SAS Credit Scoring for Banking

system.

GPB’s market risk management sys-

tem (relating to equity and debt securi-

ties, currency, interest rate and market

liquidity risks) is based on the qualitative

and quantitative market risk assessment

involving VaR methodology, stress-test-

ing, scenario analysis and sensitivity anal-

ysis. For calculating VaR estimates, the

delta normal/historical method is used

with a 98.8% confidence probability cor-

responding to the Bank’s target credit

rating (without taking government and

shareholder support into account).

The qualitative measures of mar-

ket risks are supported by the results of

a scenario analysis and (in case of inter-

est rate risk) with an analysis of sensitiv-

ity of the Bank’s economic performance

and net interest income to changes in

interest rates.

The market r isk management

system was adjusted in 2009 and

2010 to function in a post-crisis econ-

omy. A stress-testing procedure was

introduced within the business pro-

cess for setting and revising limits.

The regulatory framework governing

the measurement and management

of all market risks was updated. The

process of preparing regular manage-

rial reports for the Bank’s management

and collegial bodies in relation to all

types of financial risks was accelerated.

A project was also launched to imple-

ment an integrated system for manag-

ing market and liquidity risks with the

involvement of the world’s leaders in

the development of IT risk manage-

ment systems. Assesment of models for

market risk measurement at the end of

2010 proved models to be reliable.

The liquidity risk management sys-

tem enables aggregated qualitative and

quantitative measurement of liquidity

risk with respect to GPB Group’s transac-

tions in general.

The approach employed by the Bank

is based on allocating all transactions

to different liquidity tiers and a scenario

analysis. All tiers determine periods dur-

ing which the growth of liquidity risk is

expected and the available measures

adequate to eliminate it.

THE SYSTEM OF INDICATORS AND RATIOS DEVELOPED BY THE BANK FACILITATES ASSESSMENT OF CHANGES OCCURRING IN EXTERNAL MARKETS (RUSSIAN AND INTERNATIONAL) AND MONITORS THE DYNAMICS AND PROBABILITY OF OCCURRENCE FOR CRISIS EVENTS ON A DAILY BASIS.

A similar system based on intra-bank

indicators is employed to determine po-

tential shock changes in the Bank’s port-

folio and mitigating measures to be used

to minimize then at preliminary stages.

The Bank regularly assesses the ad-

equacy of the models employed and, if

necessary, revises parameters and meth-

odological approaches for measuring li-

quidity risk. In 2010, the Bank approved

the “Unified Approach to Forecasting

GPB Cash Flows “ to update the main

principles and parameters used to meas-

ure liquidity risk.

Operational risk is understood by

the Bank as the risk of losses which

may be incurred due to inadequate

or erroneous processes, actions by

the Bank’s personnel or its systems,

or external factors. In 2006, the

Bank’s Management Board approved

the Operational Risk Management

Policy ensuring a systemic approach to

identifying, analyzing and measuring

operational risks and losses that may


45

be incurred due to their occurrence

(risk events) as well as planning for the

Bank’s operations during unforeseen

(force-majeure) circumstances.

The operational risks management

system is being developed by the Bank

on a scheduled basis with consistent

integration of system components,

from basic to complex ones. Since

the beginning of 2007, the Bank has

been collecting information about op-

erational risk-related risk events within

a single informational space, combin-

ing the Bank’s head office and branch

network. The unified approach to

identifying, measuring and monitoring

operational risks is based on the meth-

odological base created in the Bank. To

implement its proactive approach to

managing operational risks, the Bank

employs a system of key indicators of

operational risk (KRIs).

The Bank’s main approach to opera-

tional risk assessment today is qualita-

tive measurement based on risk rat-

ing by a degree of significance. The

results of the qualitative measurement

of operational risk are used by the

Bank’s committees, among other things,

when empowering the Credit Commit-

tees of branches to independently as-

sume credit risks and setting personal

limits for the Bank’s officers.

At the same time, the Bank has also

developed (and fixed in its internal reg-

ulations) methodologies for quantita-

tive measurement of operational risk as

required by Basel II. Since 2009, the Bank

has regularly conducted quantitative

analyses of operational risk in accord-

ance with the approved approaches;

the measurement results are expected

to be used for making managerial de-

cisions following the accumulation

of an adequate amount of statistical

information regarding operating losses.

The results of quantitative measures for

operational risk are aggregated into the

Bank’s single qualitative measure of all

types of risks.

To ensure feedback from the

Bank’s management, an operational

risk reporting system is in place. The

Bank’s risk management unit prepares

and submits a report on the Bank’s ma-

jor operational risks to the Corporate

Governance and Remuneration Com-

mittee on a quarterly basis. After discus-

sions, the Corporate Governance and

Remuneration Committee approves/en-

dorses managerial decisions and meas-

ures designed to manage operational

risks that are significant to the Bank’s op-

erations and, if necessary, prepares a list

of additional measures and orders for

implementation.

The main provisions of this report are

included in the Bank’s Report on Major

Risks submitted to the Bank’s Manage-

ment Board on a quarterly basis.

Another strategic task for opera-

tional risk management is to improve

the Bank’s risk management culture

and general knowledge of operational

risk management procedures em-

ployed by the Bank and its subsidiar-

ies. For purposes of improving general

operational risk management culture,

officers are regularly trained to im-

prove their risk management skills both

in an on-site mode and a generally

available remote mode.

The concept of the operational risk

management system employed by the

Bank presumes that the main func-

tions associated with the day-to-day

management of operational risks must

be charged directly to the Bank’s sub-

divisions which require, correspond-

ingly, comfortable and effective tools

to analyze, measure and manage op-

erational risks. The Bank is currently im-

plementing an IT project designed to

introduce SAS Oprisk Management, an

automated operational risk manage-

ment system.

This project is expected to improve

the efficiency of subdivision perfor-

mance due to the improvement of

operational risk management pro-

cesses and providing the Bank with

the necessary set of tools to bring the

Bank’s operational risk management

system in compliance with Basel II

requirements.

In term of the Bank’s risk manage-

ment system, risk insurance is consid-

ered one of the management methods

providing for the transfer of unfavorable

financial consequences to a third party

(insurer).

For purposes of managing credit

risks, insurance coverage is provided in

the following ways:

● the Bank executes insurance con-

tracts with respect to loss risks arising

from the failure of the Bank’s coun-

terparties to fulfill or properly fulfill

their obligations.

● the Bank’s counterparties execute in-

surance contracts covering the items

of property provided as a collateral,

health and life of a borrower (guaran-

tor) and liability for a failure to prop-

erly honor obligations to the Bank.

In 2008, the Bank established a regu-

latory framework for risk insurance and

documented the principles to comply

with when contracting insurance com-

panies to obtain insurance against the

above mentioned risks and eligibility

requirements to insurers, including the

requirement to comply with the provi-

sions of the Federal Law “On Protecting

Competition”.

RISk MANAGEMENT RISK MANAGEMENT FRAMEWORK

46

For purposes of managing opera-

tional risks, Gazprombank enters into

the following insurance contracts

each year:

● A packaged property insurance

contract under the program “Bank-

ers Blanket Bond” (“BBB”) (with a re-

sponsibility cap for 2010 and 2011 of

USD 40 million) that includes:

Classical BBB policy (insurance

of banks against crimes);

Electronic and Computer Crime;

Professional Indemnity.

● Insurance contract covering the

Bank’s risks as those of an issuer of

credit cards.

● Insurance contract covering the

Bank’s ATMs.

To reduce the level of credit risks

arising from the execution of insurance

contracts in unstable conditions, the

Bank is permanently monitoring the fi-

nancial stability of insurance companies

to ensure an optimal ratio of insurers’

own capital to their obligations assumed

under insurance contracts covering the

Bank’s risks.

Risk aggregation and economic

capital assessment techniques have

been regularly employed since 2010.

GAZPROMBANK EVALUATES AND ALLOCATES ITS ECONOMIC CAPITAL BETWEEN BUSINESS AREAS AND ASSESSES ITS RISK-ADJUSTED PERFORMANCE.

Risk-adjusted performance is as-

sessed for the Bank in general, by busi-

ness area and for individual portfolios.

Such assessments are made for actually

opened positions, the level of their ex-

posure to risk and performance results

as well as within the Bank’s current stra-

tegic planning.

The purpose of assessing risk-ad-

justed performance and business plan-

ning is to ensure an adequate income-

to-risk ratio. The achievement of such

a ratio allows the Bank to optimize per-

formance with a guarantee of absolute

reliability subject to the prescribed

risk appetite. Necessary economic

capital is determined as the sufficient

amount of the Bank’s own capital for

covering unexpected losses and fulfill-

ing the Bank’s unsubordinated obliga-

tions during 1 year with a probability

corresponding to its own target credit

rating (without taking into account

any uplifts on its ratings related to

potential support from government

or shareholders). The target reliabil-

ity level, inclusive of government and

shareholder support, depends on the

Bank’s credit rating and is set at 99.7 %

(98.8% without taking the support into

account accordingly).

The models employed to measure

risks for purposes of calculating capital

requirement are based on provisions

of the Basel Agreement “International

Convergence of Capital Measure-

ment and Capital Standards: New Ap-

proaches”, known as Basel II, and pro-

posals included in the package known

as Basel III given the specificity of the

Bank’s business. Capital requirements

are calculated using credit risk, curren-

cy risk, equity and debt securities risk,

operational risk and interest rate risk.

Risk exposure and capital require-

ments are measured at the descending

phase of economic cycle. Nevertheless,

the Bank creates an additional capital

“buffer” equal to 25% of the capital re-

quirement. The purpose of the buff-

er is to ensure the continuity of the

Bank’s business and ensure capital ad-

equacy in the event extremely unlikely

events occur simultaneously (e.g. a de-

fault by several major borrowers) and to

consider the effects of the relevant eco-

nomic cycle and model risks.

In accordance with the approved

risk appetite figures, the final value of

capital requirement plus the buffer

must not exceed the Bank’s actual

(available) capital.

The creation of a integrated group-

wide risk management system for

Gazprombank Group is one of the top-

priority objectives in coordinating risk

management processes.

THE TRANSITION OF THE GROUP’S BANKS TO GROUP RISK MANAGEMENT STANDARDS COVERING RISKS OF THE GROUP’S FINANCIAL ORGANIZATIONS WAS COMPLETED IN 2010, AND HAS ALLOWED IMPROVEMENTS IN THE QUALITATIVE LEVEL OF MEASURING AND MONITORING ECONOMIC RISKS AND ENHANCED CONTROL OVER THE MANAGEMENT OF RISKS IN GPB GROUP’S FINANCIAL ORGANIZATIONS.

The regulatory and methodological

base underlying the Group’s risk man-

agement system is comprises the high-

level documents approved by the Board

of Directors of the Bank in September

2009 (GPB Group’s Risk Management

Policy and Procedure for Arranging a Risk

Management System in GPB Group’s Fi-

nancial Organizations) and methodolog-

ical internal bank documents approved


47

in December 2009 by the Bank’s Man-

agement Board.

In the current phase of creat-

ing an integrated risk management

system for the Group, regular risk re-

ports are prepared and submitted

by the Group’s bank organizations to

Gazprombank’s Management Board.

For purposes of implementing a proac-

tive risk management approach, an on-

line day-to-day monitoring of key risks,

to which the banks of the Group are

exposed, has been introduced. A task

has been set requiring the develop-

ment of a risk management function

in the Group’s banks and improving its

level of integration with corporate gov-

ernance processes.

Internal Control System

In accordance with the generally

accepted international practice, the

Bank is implementing an integrated

approach to coordinating internal con-

trol procedures. The internal control

procedures encompass all manage-

ment levels of the Bank, and all types

of its business as well as its branches

and units.

Gazprombank Group’s internal policy

documents establish Principles and uni-

form standards for arranging the Internal

Control System.

THE CULTURE OF INTERNAL CONTROL IS A FUNDAMENTAL COMPONENT OF THE BANK’S INTERNAL CONTROL SYSTEM, I.E. ALL MORAL AND ETHIC PRINCIPLES, PROFESSIONAL AND CORPORATE CULTURE STANDARDS AIMED AT ENSURING THAT EMPLOYEES AT ALL LEVELS ARE AWARE OF THE IMPORTANCE, SIGNIFICANCE OF AND NEED FOR INTERNAL CONTROLS.

The Bank’s management bodies are

responsible for creating an adequate cor-

porate culture by emphasizing and dem-

onstrating to employees the importance

of internal controls at all levels.

Compliance with the principles of

corporate and business ethics is one

of the main areas for improving the

Bank’s internal control system.

The Audit Committee under the

Bank’s Board of Directors functions in

the Bank. The Audit Committee’s pow-

ers include assessing the Bank’s internal

control procedures and preparing sug-

gestions on how to improve them. Any

matters referred to the Bank’s Board of

Directors for examination which relate to

such areas, are subject to prior examina-

tion by the Committee.

An important role in ensuring the ef-

fective functioning of the Bank’s internal

control system is played by the Internal

Control Service (ICS) that directly assists

the Bank’s management bodies in en-

suring the effective performance of the

Bank.

The work of the Internal Control Ser-

vice is based on the principles of consist-

ency, independence, impartiality and

professional competence.

The ICS performs its monitoring

functions by inspecting and verify-

ing the activities of all subdivisions

(branches) of the Bank and the per-

formance of its individual officers for

compliance with the requirements

of the applicable Russian Federation

laws, regulations and professional

standards, internal business regula-

tions and determining its policies and

job descriptions.

Reports on the results of the ICS’s in-

spections containing information about

defects and deficiencies as well as rec-

ommendations on how to remedy them

and improve control procedures are fur-

nished to the corresponding heads of

the Bank’s subdivisions (branches), the

Chairman of the Management Board

and the Board of Directors.

The ICS interacts, within its pow-

ers, with the Audit Committee of the

Bank’s Board of Directors, Revision Com-

missions and external auditors by pro-

viding information about the internal

control system and main defects re-

vealed during inspections.

The ICS participates in the work of

the Bank’s committees and has the right

of consultative vote.

RISk MANAGEMENT

48

A package of measures designed to

mitigate the Bank’s potential losses if

any risks occur has been developed and

is under implementation. An integral

part of internal control processes is the

implementation of procedures which

guarantee a complete separation of

business areas to avoid any heightened

operational risks and conflicts of interest,

and, in general, to provide an adequate

mechanism for approving transactions

and ensure the safety of shareholder, in-

vestor, depositor and customer funds.

The Bank’s internal policy documents

set out methods for handling any conflicts

of interest between the property and oth-

er interests of the Bank, and/or those of its

officers and/or those of its customers and

counterparties, as well as methods for miti-

gating any related negative consequences.

In the processes of managing infor-

mation flows and ensuring informational

safety, internal controls are based on

generally accepted control models em-

ployed in the IT area.

One of the ICS’s top-priority missions

is to create a risk-oriented internal con-

trol system contemplating the conduct

of audits with respect to the areas which

most affect risk exposure, which im-

proves the efficiency of internal controls.

THE ICS’S TOP-PRIORITY TASKS IN 2011 AND 2012 ALSO INCLUDE IMPROVING THE MONITORING EFFICIENCY OF THE INTERNAL CONTROL SYSTEM FOR THE BANK’S REGIONAL NETWORK, ARRANGING EFFECTIVE COOPERATION WITH THE CONTROLLERS OF BRANCHES, AND MONITORING TRANSACTIONS PERFORMED BY THE BANK’S BRANCHES.

Currently, control lers work in

27 branches of the Bank. Work plans

for controllers are being developed

pursuant to the ICS’s action plan.

The internal control system is

monitored on an ongoing basis by the

Bank’s management bodies, the Inter-

nal Control Service, the independent

auditor, and the heads and officers of

various departments, including those

performing banking transactions and

trades, and those responsible for main-

taining accounting statements and tax

reports.

The Bank has implemented proce-

dures for the regular complex assess-

ment of its internal control system.

The units of the Bank’s head office and

branches take part in the annual as-

sessment procedures arranged by the

Internal Control Service.

The outcomes of an assessment of

the Bank’s internal control system are

regularly reviewed by the Corporate

Governance and Remuneration Com-

mittee and brought to the attention of

the Bank’s Board of Directors.


49

Compliance Control in the Bank

The world’s banking practice pays

more and more attention to the man-

agement of compliance risks. Compli-

ance is an integral part of the corporate

culture in which the performance by

each officer of its office duties, includ-

ing decision making at all levels, must

be consistent with the requirements of

laws, regulators, various standards, and

internal policy documents and regula-

tions of the company itself.

In accordance with international

practice, GPB has created a Compliance

Control Department, whose main func-

tion is to monitor Bank officers’ compli-

ance with applicable rules, requirements

and banking standards, including pro-

fessional ethical standards, and compli-

ance risk management 1.

The purpose of the compliance risk

management system is to prevent the

occurrence, and to identify a poten-

tial occurrence, of compliance risks at

early stages and to employ effective

measures to manage compliance risks.

Proper methods must be developed

for eliminating and mitigating their

negative consequences for the Bank, its

shareholders and customers, taking the

interests of all parties into account. Infor-

mation about any compliance risks re-

vealed is brought to the attention of the

Bank’s top executive responsible for co-

ordinating compliance functions and to

the attention of the head of the impact-

ed business units, and must be included

in the annual performance report by

the Compliance Control Department

which is furnished to the Bank’s Board of

Directors.

In 2010, for the purposes of prevent-

ing any misuse by the Bank’s officers

of insider information and to handle

conflicts of interest when entering into

transactions in the securities market for

their benefit and account, the Chair-

man of the Bank’s Management Board

approved the “Rules for compliance by

the employees of Gazprombank (Open

Joint-stock Company) when perform-

ing transactions in financial instruments”,

pursuant to which the Compliance Con-

trol Department monitors transactions

executed by the Bank’s officers in their

personal interests.

Furthermore, in 2010 the Compliance

Control Department was charged with

the task of monitoring the Bank’s com-

pliance with the requirements of Federal

Law No.224-FZ dated July 27, 2010, “On

the Prevention of the Illegal Use of Insid-

er Information and Market Manipulation

and Amendment of Individual Legisla-

tive Instruments of the Russian Federa-

tion”. In 2011, the Compliance Control

Department will continue its efforts to

create adequate control procedures to

ensure compliance with the require-

ments of Law No.224-FZ of the Russian

Federation; the list of the Bank’s insider

information and insiders has been pre-

pared and approved.

1 Compliance risk is the risk that compliance orders will be issued or sanctions will be imposed by the Bank of Russia, judicial or executive bodies; that losses will be incurred; that the bank will lose its reputation as a result of its failure to comply with applicable rules, requirements or standards, i.e. laws or by-laws, generally accepted principles or standards of international law or international treaties, to which the Russian Federation is a party, or business practices or other requirements binding on the Bank or its internal regulations.

RISk MANAGEMENT

50

Corporate Governance

Corporate Governance System

The Bank’s corporate governance

system was improved in 2010 based

on Gazprombank’s fundamental docu-

ments including its updated versions of

the Charter, Regulations on the Board

of Directors, Regulations on GPB’s Ex-

ecutive Bodies and Regulations on Re-

munerations and Reimbursements for

Members of the Board of Directors ap-

proved by the annual General Meeting

of Shareholders in June 2010.

At its 24 meetings, the Board of

Directors focused its attention on set-

ting strategic and long-term develop-

ment objectives for the Bank, both in

general and for specific business lines.

The Strategy until 2015 and Financial

Plan of GPB Group 2011 were both

approved.

The Board of Directors functions

were expanded for matters associated

with ensuring effective interaction be-

tween the Bank’s shareholders and man-

agement and expanding joint efforts

between GPB (OJSC) and its main share-

holder OAO Gazprom.

The Audit Committee of the Board of

Directors considered matters reserved to

it as scheduled and, among other things,

assessed the efficiency of internal control

procedures, compliance control in the

Bank, and draft action plans prepared for

the corresponding subdivisions.

Risk management processes are de-

veloped under the immediate supervi-

sion of the Board of Directors and the

Management Board of GPB. The quality

of the Bank’s risk management system

has been improved by reorganizing its

structure, improving employee com-

position and methodical development,

and by increasing responsibility through

subordination of the relevant business

line to a member of the Bank’s Manage-

ment Board.

The Bank’s Board of Directors has

approved the Long-Term Incentive Pro-

gram for GPB employees. The principles

of financial incentives are consistent

with the recommendations of the Cen-

tral Bank of the Russian Federation and

market trends, both in terms of their

connection to the performance of the

Bank and its subdivisions, and in terms

of the use of deferred and long-term

benefits.

The coordination of work for improv-

ing the corporate governance systems

of subsidiary banks is based on regular

monitoring and utilizing best practices

accumulated by the Group. Constitu-

ent documents and internal regulations

for subsidiary banks covering corporate

governance are brought into compli-

ance with the standards employed

by Gazprombank. A consolidated risk

management system has been intro-

duced in GPB Group.

The Bank’s Management Board ex-

amined 328 matters during its weekly

meetings (60 meetings). The Manage-

ment Board determined priorities in the

field of financial policies and the man-

agement of assets and liabilities, and

preliminarily examined matters referred

to the Board of Directors for review. Is-

sues associated with the Bank’s financial

planning, strategic development, bank-

ing process improvements and approval

of accounting statements were regularly

discussed.

The Management Board systemati-

cally reviewed reports and strategies for

developing individual business lines.

The Management Board has reviewed

the Bank’s prospects for providing ser-

vices to Russian exporters as part of

a government program to support the

export of industrial products. It has

also reviewed plans for developing the

Bank’s business geared towards mid-

sized corporate customers, and meas-

ures to mitigate the risks associated

with the Bank’s depository business

and other key issues.

To coordinate the scope of the

Bank’s business, the Management Board

has examined matters associated with

the optimization and development of


51

Organizational Management Сhart оf Gazprombank (Open Joint-Stock Company)

MEETING OF SHAREHOLDERS

AUDITOR OF THE BANk

COMMITTEES

AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

MANAGEMENT BOARD

CHAIRMAN OF THE MANAGEMENT BOARD

BOARD OF DIRECTORS REvISION COMMISSION

FIRST/EXECUTIvE/vICE PRESIDENTS, ADvISORS TO THE CHAIRMAN AND TO THE MANAGEMENT BOARD

DEPUTy CHAIRMAN OF THE MANAGEMENT BOARDFinancial planning, equity development, subsidiary companies

DEPUTy CHAIRMAN OF THE MANAGEMENT BOARDTreasury, customer transactions in financial markets, capital market, trust

management, correspondent relations

DEPUTy CHAIRMAN OF THE MANAGEMENT BOARDCorporate customer base, private banking

DEPUTy CHAIRMAN OF THE MANAGEMENT BOARDCredit policy, transactions in precious metals, information technologies

MEMBER OF THE MANAGEMENT BOARD, FIRST vICE PRESIDENT

Corporate lending, factoring, documentary transactions

DEPUTy CHAIRMAN OF THE MANAGEMENT BOARDProject & structured finance, direct investments, non-core assets

DEPUTy CHAIRMAN OF THE MANAGEMENT BOARDCorporate finance, direct investments

(gas & oil production, other mineral resources)

DEPUTy CHAIRMAN OF THE MANAGEMENT BOARDBank development strategy, retail business policy, participation in government

programs, industrial assets

DEPUTy CHAIRMAN OF THE MANAGEMENT BOARDAdministrative & corporate governance, HR management,

branch network, subsidiary banks

DEPUTy CHAIRMAN OF THE MANAGEMENT BOARD — CHIEF ACCOUNTANT

Accounting and tax records and reports, back office, non-cash settlements

DEPUTy CHAIRMAN OF THE MANAGEMENT BOARDLegal support to corporate policy, media assets management,

compliance control


Legal support to banking activities and troubled debt

DEPUTy CHAIRMAN OF THE MANAGEMENT BOARDSafety, industrial assets management, financial monitoring, tender purchases,

administrative support


Implementation of retail business policy, Moscow regional retail network, depository services

DEPUTy CHAIRMAN OF THE MANAGEMENT BOARDPolicy and general coordination of matters associated with safety


Risk management policy, limits policy, online monitoring of transactions in financial markets

CORPORATE GOvERNANCE

52

GPB’s regional network and subsidiary

banks, and heard reports on the perfor-

mance of a number of its branches.

The Bank’s devoted Management

Board committees held their meetings

on a regular basis. These committees

included the assets and liabilities man-

agement committee, the credit com-

mittee, the investment committee,

the process committee, the customer

policy committee and corporate gov-

ernance committee (converted to the

Corporate Governance and Remunera-

tion Committee). New versions of pro-

cedures covering the work of a series

of committees have been approved.

The composition of the committees has

been optimized.

Infrastructure and Regional Network Development

The front office network of GPB, as of

January 1, 2011, included 43 branches,

194 supplementary offices, 12 operational

offices, 1 credit and cash services office,

10 out-of-the-office cash counters, i.e.

260 offices selling banking products in total.

Two new branches, in Kazan and Sur-

gut, were registered in 2010.

In completing a project designed to

optimize the branch network operating

in the Tyumen region, the Nadim Branch

of GPB was assigned the status of a satel-

lite office of GPB in Noviy Urengoy on Oc-

tober 1, 2010. The internal business units

of the branch were made subordinate to

the Noviy Urengoy Branch of the Bank.

In 2010, projects were completed

which established 15 internal business

units within the Bank’s branches, while

2 satellite offices were separated. In

2010, the Bank’s Management Board re-

solved to open another 14 internal busi-

ness units in 2011.

Within Gazprombank’s “Developing

a Network of Satellite Offices in Saint-

Petersburg in 2010” project, work was

completed to open 2 satellite offices

(Severniy and Vasileostrovsky).

Fur ther development of the

Bank’s branch network requires attract-

ing major enterprises to the regions

where the branches are currently locat-

ed, participating in the most important

investment projects and further expand-

ing joint efforts with Gazprom Group.

One of the top-priority strategies for the

Bank’s regional policy is to actively ex-

pand relations with mid-sized corporate

customers and individual customers.

It is expected that 22 internal busi-

ness units of GPB’s branches will be

open for business to provide services

to corporate and individual customers

in 2011. In particular, satellite offices will

be opened in cities such as Nabereah-

niye Chelni, Nizhnekamsk, Kazan and

Saint-Petersburg.

Gazprombank’s representative offices

facilitate the promotion of business and

implementation of individual projects

for the Bank’s corporate customers in

China, Mongolia and India and provide

assistance in moving forward projects

in the field of direct investments, pro-

ject and trade finance, and commercial

lending.

In 2010, the Banking Group included

subsidiary banks such as Credit Ural

Bank, Noyabrskneftekombank, Sever-

gazbank, Sibirgazbank, AREXIMBANK —

GAZPROMBANK GROUP, GPB-Ipoteka

and Belgazprombank. Russian Com-

mercial Bank AO (Zurich, Switzerland),

also a member of the Group, was re-

named Gazprombank (Switzerland) Ltd

in 2010.

The development of each bank

within the Group is subject to the

Group’s development strategy in

general. Uniform standards for the

Group’s business and common ap-

proaches to planning, budgeting and

reporting are being developed; a sin-

gle customer policy applying to large

corporate customers and financial in-

stitutions is being implemented; cen-

tralized risk management based on in-

ternational recommendations is being

introduced. The strengthening of the

Group’s positions in certain regions is

ensured through expanding the range

of available banking services, introduc-

ing new financial instruments and de-

veloping the banks’ equity.


53

Personnel and Organizational Development

GPB’s shareholders and Manage-

ment Board are devoted to the prin-

ciple that the Bank’s officers are the

Bank’s main “intangible” asset, whose

value must only increase over time. It is

the Bank’s officers who create additional

value for shareholders, customers and

society in general with their effective

and creative efforts.

The Bank’s team is comprised of

about 9,000 highly qualified managers

and specialists united by a common

vision and focused on accomplishing

common tasks who have passed train-

ing in the best Russian and leading for-

eign educational centers. They include

10 Doctors of Science and Philosophy

Doctors.

The creation of a comfortable inter-

nal work environment among officers

facilitates the discovery of talented spe-

cialists, fosters self-actualization, creates

a sense of ownership and achievement

of common goals, and satisfies their

needs for development and growth.

Employee turnover at the Bank is the

lowest in the Russian banking system.

This is also facilitated by a constantly de-

veloping social protection system cover-

ing the interests of officers and family

members through various internal cor-

porate programs.

The Bank pursues a policy which con-

templates the reformation of compensa-

tion practices and the introduction of

international standards in its employee

incentive system. Variable employee

benefits tied to long-term growth in

capitalization and achievement of the

Bank’s strategic plans are linked to in-

dividual performance, achievement of

key performance indicators by business

units and interspaced in time.

The challenges facing Gazprombank

require maintaining a high level of quali-

fication and training for personnel. Reg-

ular advanced training was facilitated by

about 600 training and advisory events

completed during the year. 2,900 officers

passed on-site training and 6,100 were

trained using remote means. New forms

of training (e.g. open trainings) and new

partners (in particular, Skolkovo Business

School which provides managerial edu-

cation services) have become available.

The training provided to the

Bank’s executive staff is based on a two-

level model. Individual training plans

have been developed for the managers

and specialists included in the opera-

tional reserve. A special annual develop-

ment program has been prepared for

employees included in the future-orient-

ed reserve. The training system covering

the reserve of future executives has ad-

ditional functions such as an “incubator”

of innovations, improvement of team-

work and achievement of the creative

potential of succession candidates.

The Bank also takes care of its future

employees. 20 name scholarships are al-

located each year to the most successful

students of 7 leading Russian higher ed-

ucation institutes. In 2010, 6 grants were

paid to the best students at the Mos-

cow School of Economics under the M.

V. Lomonosov Moscow State University.

About 200 students have undertaken an

internship in the Bank’s subdivisions.

Gazprombank’s long-term business

partnership with the country’s leading

educational centers has been highly rat-

ed by the Russian Rectors Union — GPB

won the 1st Business Partners of Higher

Education Institutes Competition in the

Largest Contribution to Supporting Gifted

Students and Young Teachers nomination.

The Bank’s investments in its person-

nel reserve and the education of young

people pay back very quickly. By the

end of training, about 40% of succes-

sion candidates execute employment

contracts and a number of students,

who have received name scholarships,

join the Bank’s team after graduation.

This is also facilitated by the active role

of the Bank’s top managers in selecting

the reserve, which creates a feeling of in-

volvement and vision with GPB’s devel-

opment prospects.

The Bank’s organizational structure is

constantly transforming in accordance

with the needs for business develop-

ment. Efforts are being redirected to-

wards long-term investment projects

aimed at the technological refurbish-

ment of mid-sized and small businesses,

more effective management of bank-

ing risks, and expanding GPB’s regional

presence. The service enhancements of

feasibility, reliability, quality, convenience

and safety offered to the Bank’s custom-

ers also remain among the key priorities

of the Bank.


54

IT Development

The following areas were GPB’s prior-

ity development strategies for the IT area

during 2010:

● Introduction of a hardware and soft-

ware platform to automate cash

and settlement services using the

software developed by the Center

of Financial Technologies and the

Bank’s integration platform based on

IBM’s WebSphere software;

● Centralization of the Bank’s settle-

ment system using a solution from

the Center of Financial Technologies.

ONE OF THE MAIN RESULTS FOR THE YEAR WAS THE LAUNCHING (IN A TEST MODE) OF THE AUTOMATED GENERAL LEDGER SYSTEM DEVELOPED BY CUSTIS WHICH ENABLES THE COMPLETE AUTOMATION OF ACCOUNTING AND STATUTORY REPORTING FOR THE CENTRAL BANK OF THE RUSSIAN FEDERATION.

The Bank is planning to implement

the architecture for a centralized ledger

in accordance with the Bank’s main IT

development principles (componenti-

zation, centralization and integration of

main automated banking systems).

The Interaction Management Sys-

tem — IMS integration platform has

been introduced to enable the imple-

mentation of integration principles

with respect to heterogeneous infor-

mation systems employing the latest

IT solutions and software. This solution

will allow the prompt and effective

combination of information systems

into a single communication contour.

The successful connection of one of the

Bank’s branches to the centralized set-

tlement system has provided opportu-

nity to master the technology in order

to further interconnect all branches of

the Bank to create a single communica-

tion contour.

Measures have been taken to im-

prove fail safety, reliability and accessibil-

ity of the main banking and corporate

information systems based on current

hardware and software platforms of-

fered by companies such as IBM, HP, Ora-

cle, Symantec, EMC.

The internet-based Home Bank

banking service has been successfully

put into pilot operation based on a so-

lution developed by BSS. This system

offers all transactional and information

services to holders of the Bank’s plastic

cards. The Bank plans to expand func-

tional capabilities of that system in

2011 to service retail accounts, trans-

fers and credit products. The technol-

ogy allows significant reductions in

operating expenses for providing ser-

vices to individuals and represents an

alternative remote communication

channel which allows banking services

to be available at any time convenient

for customers.

One of the innovative IT projects im-

plemented by the Bank has been the in-

troduction in the financial company GPB

Financial Services of an information sys-

tem enabling end-to-end automation of

trading operations in financial markets.

It is based on a solution developed by

Calypso, one of the world leaders in IT

products in that particular niche. Start-

ing in 2011, the solution will be integrat-

ed to cover all transactions performed

by the Bank’s head office.

To improve the level of corporate

governance, the implementation of an

HR assessment and document man-

agement system has been completed

which has automated personnel-relat-

ed processes. The conversion of salary

and personnel-related record-keeping

processes to a centralized accounting

system has been completed using the

Boss — Company solution.

The corporate intranet portal based

on MS SharePoint was introduced in

2010, and has enabled the Bank to cre-

ate a single information room for joint

work between business units (includ-

ing branches) and for the centralized

search of structured and unstructured

information.

The short-range plans include

launching an automated document

management system based on the Doc-

umentum solution and upgrading of the

Bank’s corporate telephony and call pro-

cessing center using the most modern,

hi-tech IT solution offered by Avaya.


55

Social Responsibility

Charitable projects and other spon-

sorships were implemented under the

20th Anniversary banner in 2010, an an-

niversary year for the Bank. During the

year, Gazprombank successfully imple-

mented more than 500 charitable and

sponsorship projects.

GPB’s charitable activities were car-

ried out on a systematic basis with the

core of the Charity and Sponsorship

Program 2010 comprised of projects

that had been financed by the Bank

for many years.

The Bank’s long-term projects in-

clude providing aid to children deprived

of parental care and supporting educa-

tional and social-and-cultural institu-

tions such as Valaamsky Friary, The State

Museum Moscow Kremlin, Pushkin State

Museum of Fine Arts, Orthodox Ency-

clopedia Church and Scientific Center,

Russian Dancers’ Union and others.

Special attention was paid to the vet-

erans of the Great Patriotic War during

the celebration of the 65th Anniversary

of Victory Day.

Traditionally, one of the Bank’s main

areas of emphasis in social support is

providing aid to orphaned and handi-

capped children as well as to persons

facing difficult challenges in their lives.

Thus, in 2010, the Bank implemented

various support programs for regions

that had suffered from summer fires. At

the initiative of its branches, the Bank

allocated funds for restoring burnt-out

homes and providing financial support

to local communities. Such aid was sent

to the settlement centers in the Voron-

ezh, Lipetsk, Nizhniy Novgorod and oth-

er regions of the central area of Russia.

Gazprombank also made its contribution

by providing aid to children who suf-

fered from fires through the charitable

hockey match arranged by the Admin-

istration of the President of the Russian

Federation and Spartak, a professional

hockey club from the Capital (“With All

Heart” campaign).

On New Year’s Eve, the Bank held the

I believe in Santa! charity event which has

already become a good tradition for the

GPB team — the Bank’s officers fulfilled

the wishes of orphaned children who

dreamt of receiving New Year’s gifts. In

2010, gifts were purchased for children

living in Special Orphanage No.2 which

accommodates orphaned children

deprived of parental care. Each of the

62 children living in the orphanage re-

ceived a gift.

Another oppor tunity for the

Bank’s officers to make a personal con-

tribution to charitable projects is the an-

nual Help Children! event, the proceeds

of which are used for the medical treat-

ment of sick children.

As part of its cooperation with the

Russian Orthodox Church, the Bank

provides financial support both to or-

thodox monasteries and public ortho-

dox organizations. Such projects in-

clude the publication of the Orthodox

Encyclopedia and restoration of two

stavropegial friaries, Spaso-Preobraz-

hensky Valaamsky and Spaso-Preobraz-

hensky Solovetsky Friaries.

In particular, thanks to Gazprom-

bank’s aid, the buildings of the Port-

naya and Chobotnaya Chambers,

being part of the Spaso-Preobrazhen-

sky Solovetsky Friary ensemble and

a monument of federal importance

were restored.

Significant attention is paid to pro-

viding aid to veterans. Over the past

several years, the Bank has provided sup-

port to the Moscow Non-Governmental

Organization of Veterans of War, the

Penza regional organization All-Russian

Non-Governmental Organization of Af-

ghanistan War Disabled Veterans, and

the Regional Charity Non-Governmen-

tal Support Fund for Developing the

Bolshoy Theater. Charity events have

been held in honor of the 65th Anniver-

sary of the Great Victory Day to provide

financial aid to the veterans of the Great

Patriotic War, who include ex-officers of

OAO Gazprom, Saint-Petersburg State

University, the Mercy regional charity

fund for supporting the social protection

of foreign intelligence service veterans

and members of their families, and the

regional Non-Governmental organiza-

tion, Military Counterintelligence Service

Veterans.

Facilitating the preservation of

Russia’s historical and cultural herit-

age is one of the top-priority areas of

Gazprombank’s charity and sponsorship

activities. The Bank’s cooperation with

the State History and The State Museum

Moscow Kremlin has a special place in

those efforts. In the course of partner-

ships, a great number of exhibition

events has been arranged to present

unique items of the world’s cultural her-

itage and recreate a true historic atmos-

phere. The projects supported by the

Bank during 2010 included the exhibi-

tion “Sovereign Knights; Foreign Orders

of Russian Emperors”.


56

The Bank has been partnering with

Pushkin State Museum of Fine Arts

and Chekhov Studio School under

the Moscow Academic Art Theatre for

many years.

The top-priority tasks for the

Bank’s charity and sponsorship activities

also aim at providing support to sports

organizations and promoting a healthy

lifestyle. The Bank has sponsored of the

Zenit football club for many years. For

the purposes of developing the Chil-

dren’s and Youth Sports School of Zenit

football club, a special co-branded bank

card was issued in 2010. Each payment

made using the card increases charita-

ble contributions used to develop the

system for identifying and training gifted

young football players. Another impor-

tant sports project was the Bank’s part-

nership with the Continental Hockey

League. During the 2010/2011 season,

Gazprombank sponsored the KHL

Championship. In 2010 finance was al-

located for developing the Ural-Yekat-

erinburg basketball club. Moreover, as

part of its long-term partnerships, GPB

supports Russia’s Bike Sports Federation,

the all-Russia Shooting Union of Russia

public sports organization, and the Stu-

dent Sports Support Fund.

The Bank actively partners with the

country’s leading higher education in-

stitutes such as Lomonosov Moscow

State University, National University

Higher School of Economics, Moscow

State Institute of International Relations,

Saint-Petersburg State University of Eco-

nomics and Finance (FINEK) and others.

In 2010 the Bank became a partner of

the FINANCES AND DEVELOPMENT fund,

a founder of the National Competition

in Economics. The aim of the competi-

tion was to create conditions to identify

and implement the talents of students

of higher education institutes, young

specialists and scientists, to support

and encourage their scientific activities,

to reward them for scientific achieve-

ments, to lead them into innovative

activities by creating a competitive en-

vironment, to develop Russia’s intellec-

tual potential and to further integrate

science and practice.

One of the Bank’s outstanding anni-

versary events was the Gazprombank’s

Working Scholarship Holders All-Russian

Competition aimed at supporting pri-

mary and secondary professional edu-

cation and popularizing working spe-

cialties. The competition was arranged

in cooperation with 18 industrial firms

representing the strategic sectors

of the national economy. 23 educa-

tional institutions from 16 cities of the

country have taken part in the event.

Those educational institutions train

representatives of working specialties

for the strategic sectors of the Russian

economy such as nuclear power, heavy

and medium machine-building, auto

manufacturing and aircraft manufactur-

ing. Following the results of each con-

test, the jury determines the winners

who are awarded Gazprombank’s yearly

name scholarships. 920 students have

received Gazprombank’s scholarships

and, upon graduation will be afford-

ed an employment opportunity with

Gazprombank or its strategic partners

and customers.


57

Summary Consolidated Financial Statementsderived from the audited consolidated financial statements for the year ended 31 December 2010

SUMMARy CONSOLIDATED FINANCIAL STATEMENTS

58

Independent Auditors’ Report

To the Board of Directors, Gazprombank (Open Joint-Stock Company)

The accompanying summary consolidated financial statements, which comprise the summary consolidated statement of finan-

cial position as at 31 December 2010, the summary consolidated statements of comprehensive income, changes in equity and cash

flows for the year then ended, and related notes, are derived from the audited consolidated financial statements of Gazprombank

(Open Joint-Stock Company) and its subsidiaries (the Group) as at and for the year ended 31 December 2010. We expressed an un-

qualified audit opinion on those consolidated financial statements in our report dated 20 April 2011.

The summary consolidated financial statements do not contain all the disclosures required by International Financial Reporting

Standards. Reading the summary consolidated financial statements, therefore, is not a substitute for reading the audited consoli-

dated financial statements of the Group.

Management’s Responsibility for the Summary Consolidated Financial Statements

Management is responsible for the preparation of a summary of the audited consolidated financial statements on the basis de-

scribed in note 2.

Auditors’ Responsibility

Our responsibility is to express an opinion on the summary consolidated financial statements based on our procedures, which

were conducted in accordance with International Standard on Auditing (ISA) 810 Engagements to Report on Summary Financial

Statements.

Opinion

In our opinion, the summary consolidated financial statements derived from the audited consolidated financial statements of

the Group as at and for the year ended 31 December 2010 are consistent, in all material respects, with those consolidated financial

statements on the basis described in note 2.

ZAO KPMG

20 April 2011

ZAO kPMG10 Presnenskaya NaberezhnayaMoscow Russia 123317Telephone +7 (495) 937 4477Fax +7 (495) 937 4400/99Internet www.kpmg.ru

ZAO KPMG, a company incorporated under the Laws of the Russian Federation, a subsidiary of KPMG Europe LLP, and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.


59

Summary Consolidated Statement of Comprehensive Income for the Year Ended 31 December 2010

(in millions of Russian Roubles unless otherwise stated)

2010 2009(re-presented)

Interest income 100,188 140,274

Interest expense (68,417) (105,748)

Net interest income 31,771 34,526

Impairment of interest earning assets (1,655) (25,875)

Net interest income after impairment of interest earning assets 30,116 8,651

Non-banking operating revenues 94,752 80,458

Non-banking operating expenses (91,055) (73,068)

Non-banking operating profits 3,697 7,390

Non-interest (loss) gain from financial assets and liabilities held for trading (5,099) 27,911

Gain from disposal of investments available-for-sale and investments in associates 30,743 8,461

Fees and commissions income 10,882 8,788

Fees and commissions expense (2,529) (3,291)

Gain from derivative contracts with foreign currency 19,711 15,608

(Loss) gain from foreign exchange (7,427) 12,407

Other operating income 4,571 7,824

Non-interest income 50,852 77,708

Banking salaries and employment benefits (25,737) (15,211)

Banking administrative expenses (14,854) (12,285)

Recovery of impairment (impairment) of assets and provisions for other risks 443 (8,392)

Impairment of goodwill (5,989) (1,156)

Non-interest expense (46,137) (37,044)

Operating profit from continuing operations 38,528 56,705

Result from acquisitions of subsidiaries and associates 231 -

Income (loss) from equity accounted associates 2,599 (2,027)

Profit from continuing operations before profit tax 41,358 54,678

Profit tax expense from continuing operations (12,761) (15,550)

Profit for the year from continuing operations 28,597 39,128

Profit for the year from discontinued operations, net of profit tax 37,666 19,640

Profit for the year 66,263 58,768


60


Other comprehensive income

Investments available-for-sale:

Net change in fair value of investments available-for-sale 13,759 7,349

Net change in fair value transferred to profit or loss (4,850) (380)

Exchange differences on translating of foreign operations 1,381 (620)

Other comprehensive income, net of tax 10,290 6,349

Total comprehensive income 76,553 65,117

Profit for the year attributable to:

Group’s shareholders 56,881 54,255

Non-controlling interests 9,382 4,513

66,263 58,768

Total comprehensive income attributable to:

Group’s shareholders 67,864 60,351


76,553 65,117

Basic and diluted earnings per share (Russian Roubles) 3,048 2,941

The summary consolidated financial statements were derived from the consolidated financial statements of Gazprombank

Group, which were approved for issue by the Board of Directors of the Management Board of Gazprombank (Open Joint-Stock Com-

pany) and signed on its behalf on 20 April 2011.

Andrey I. Akimov Alexander I. Sobol

Chairman of the Board Deputy Chairman of the Board

20 April 2011

The summary consolidated financial statements should be read in conjunction with the consolidated financial statements of the Gazprombank Group from which they were derived.


61

Summary Consolidated Statement of Financial Position as of 31 December 2010


31 December2010

31 December2009

Assets

Cash and cash equivalents 347,066 307,723

Obligatory reserve with the Central Bank of the Russian Federation 10,400 9,860

Due from credit institutions 25,452 110,847

Financial assets held for trading 172,802 138,138

Loans to customers 1,033,370 749,292

Investments available-for-sale 57,141 43,687

Investments in associates 7,867 6,105

Receivables and prepayments 56,318 71,397

Inventories 44,537 54,171

Deferred tax assets 16,812 31,907

Property, plant and equipment 56,201 155,798

Goodwill 19,726 27,725

Intangibles 22,777 20,757

Other assets 10,659 13,735

Investments in associate held for sale 68,070 -

Other assets held for sale 2,423 -

Total assets 1,951,621 1,741,142

Liabilities

Amounts owed to governmental bodies 56,272 49,247

Amounts owed to credit institutions 89,535 139,654

Amounts owed to customers 1,185,377 880,751

Subordinated deposits 143,422 144,630

Financial liabilities held for trading 27,378 72,764

Eurobonds issued 79,392 88,227

Certificated debts 65,923 80,887

Deferred tax liabilities 10,817 14,634

Other liabilities 69,925 74,354

Liabilities associated with assets held for sale 1,699 -

Total liabilities 1,729,740 1,545,148


62

31 December2010

31 December2009

Equity

Share capital 31,836 31,836

Additional paid-in-capital 32,916 33,322

Treasury stock (5,513) (1,661)

Foreign currency translation reserve 489 (1,585)

Fair value reserve 15,275 6,366

Retained earnings 141,434 83,757

Total equity attributable to the Group’s shareholders 216,437 152,035


Total equity 221,881 195,994

Total liabilities and equity 1,951,621 1,741,142



63

Summary Consolidated Statement of Changes in Equity for the Year Ended 31 December 2010


Sharecapital

Additional paid-in capital

Treasury stock

Foreign currency

translation reserve

Fair value reserve

Retained earnings

Equity attributable

to the Group’s shareholders

Non-controlling

interests

Total equity

31 December 2008 31,836 29,731 (2,372) (712) (603) 30,256 88,136 39,744 127,880

Profit for the year - - - - - 54,255 54,255 4,513 58,768

Other comprehensive income:

Net change in fair value of investments available-for-sale - - - - 7,349 - 7,349 - 7,349

Disposal of investments available-for-sale - - - - (380) - (380) - (380)

Exchange differences on translating foreign operations - - - (873) - - (873) 253 (620)

Total comprehensive income - - - (873) 6,969 54,255 60,351 4,766 65,117

Acquisition of non-controlling interests in subsidiaries - - - - - 480 480 (480) -

Acquisition of subsidiaries - - - - - - - 18 18

Dividends paid - - - - - (1,234) (1,234) (89) (1,323)

Employee share-option plan - 3,591 711 - - - 4,302 - 4,302

31 December 2009 31,836 33,322 (1,661) (1,585) 6,366 83,757 152,035 43,959 195,994

Profit for the year - - - - - 56,881 56,881 9,382 66,263


64

Sharecapital

Additional paid-in capital

Treasury stock

Foreign currency

translation reserve

Fair value reserve

Retained earnings

Equity attributable

to the Group’s shareholders

Non-controlling

interests

Total equity

Other comprehensive income:

Net change in fair value of investments available-for-sale - - - - 13,759 - 13,759 - 13,759

Disposal of investments available-for-sale - - - - (4,850) - (4,850) - (4,850)

Exchange differences on translating foreign operations - - - 2,074 - - 2,074 (693) 1,381

Total comprehensive income - - - 2,074 8,909 56,881 67,864 8,689 76,553

Acquisition and disposal of non-controlling interests in subsidiaries - - - - - 1,915 1,915 (5,587) (3,672)

Disposal of subsidiaries - - - - - - - (40,268) (40,268)

Acquisition of subsidiaries - - - - - - - 500 500

Dividends paid - - - - - (1,119) (1,119) (1,849) (2,968)

Acquisition and sale of treasury shares - 1,199 (3,852) - - - (2,653) - (2,653)

Transfer of puttable instruments to liability - (1,605) - - - - (1,605) - (1,605)

31 December 2010 31,836 32,916 (5,513) 489 15,275 141,434 216,437 5,444 221,881



65

Summary Consolidated Statement of Cash Flows for the Year Ended 31 December 2010



Cash flows from operating activities

Interest received 99,807 141,469

Fees and commissions received 10,781 7,846

Interest paid (62,417) (106,025)

Fees and commissions paid (2,120) (3,454)

Non-interest receipts from financial assets and liabilities held for trading 6,652 10,314

Payments from derivative contracts with foreign currency (37,017) (27,458)

Foreign exchange receipts 1,758 3,208

Media business operating receipts 39,909 34,087

Media business operating payments (19,017) (16,099)

Machinery business operating receipts 33,841 40,408

Machinery business operating payments (36,663) (32,782)

Other segment operating receipts 21,001 5,964

Other segment operating payments (19,896) (5,057)

Other operating receipts 3,376 5,768

Banking salaries and employment benefit payments (19,610) (15,739)

Banking administrative expenses and other operating payments (13,366) (10,909)

Cash flows from operating activities before changes in operating assets and liabilities 7,019 31,541

(Increase) decrease in operating assets

Obligatory reserve with the Central Bank of the Russian Federation (540) (8,496)

Due from credit institutions 79,885 (11,508)

Financial assets held for trading (34,007) 24,963

Loans to customers (197,179) (100,738)

Receivables and prepayments, inventories, and other assets (12,518) 748


66


Increase (decrease) in operating liabilities

Amounts owed to credit institutions and governmental bodies (72,414) (569,068)

Amounts owed to customers 308,463 228,648

Financial liabilities held for trading - (36)

Other liabilities 7,049 (9,618)

Net cash flows from (used in) operating activities before profit taxes 85,758 (413,564)

Profit taxes paid (2,402) (21,732)

Net cash flows from (used in) operating activities 83,356 (435,296)

Cash flows from operating activities from discontinued operations 55,257 24,582

Cash flows from investing activities

Investments available-for-sale purchased (7,870) (22,292)

Investments available-for-sale sold 11,055 30,129

Property, equipment and intangibles purchased (71,492) (52,713)

Property, equipment and intangibles sold 52,850 22,850

Acquisition of subsidiaries, net of cash acquired (8,380) 1,190

Acquisition of non-controlling interest (1,020) -

Dividends received 1,314 1,930

Other cash flows from investing activities (1,698) (929)

Net cash flows used in investing activities (25,241) (19,835)

Cash flows used in investing activities from discontinued operations (55,821) (27,632)



67


Cash flows from financing activities

Share premium - 398

Treasury stock sold - 193

Treasury stock acquired (4,258) -

Certificated debts redeemed (15,787) (6,003)

Eurobonds issued 30,548 3,055

Eurobonds redeemed (40,401) -

Eurobonds repurchased (1,386) (8,652)

Syndicated loans received 27,087 49,247

Syndicated loans redeemed (1,050) -

Subordinated deposits received 325 115,000

Subordinated deposits redeemed (1,472) (46)

Financing of non-banking activities received 9,999 13,173

Financing of non-banking activities redeemed (7,255) (12,367)

Dividends paid (2,975) (3,627)

Net cash flows (used in) from financing activities (6,625) 150,371

Cash flows from financing activities from discontinued operations 3,112 488

Effect of change in exchange rates on cash and cash equivalents (14,695) 16,145

Change in cash and cash equivalents 39,343 (291,177)

Cash and cash equivalents, beginning of the year 307,723 598,900

Cash and cash equivalents, end of the year 347,066 307,723


68

SUMMARY CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2010

Note 1 — Principal activities and organization

a) Activities and organization

The Gazprombank Group (the Group)

primarily consists of:

● the parent company — Gazprom-

bank (Open Joint-stock Company)

● the group of companies owned by

CJSC SIBUR Holding (SIBUR Holding

Group) (discontinued)

● the group of companies owned by

Gazprom-Media Holding (Gazprom

Media Group)

● the group of industrial companies

(machinery production)

● other smaller companies and banks,

which are primarily part of the bank-

ing business, including Severgaz-

bank, Sibirgazbank, GPB-Mortgage,

Credit Ural Bank, Noyabrskneftekom-

bank, Areximbank, and Gazprom-

bank (Switzerland) Ltd.

The parent company of the Group —

Gazprombank (Open Joint-stock Com-

pany) (the Bank) was established in 1990.

The Bank has a general banking license

and a license for operations with precious

metals from the Central Bank of the Rus-

sian Federation (the CBR), and licenses for

securities operations and custody servic-

es from the Federal Service for Financial

Markets.

The Bank is the third largest bank in

the Russian Federation in terms of as-

sets and equity, and it provides a broad

range of predominantly commercial

banking services to many of Rus-

sia’s leading corporations and govern-

ment entities including, among others,

OAO Gazprom and its related parties

(the Gazprom Group). The principal

activities comprise commercial lend-

ing, project finance, acquisition finance,

trade finance, deposit taking, foreign ex-

change and securities trading, precious

metals operations, settlement services,

debit/credit card services, depositary

and custodian services, fund manage-

ment services and brokerage services.

The Bank also provides a range of retail

services, principally to the employees of

its corporate clients. The legal address

of the Bank is: Bld.1, 16, Nametkina Str.,

Moscow, 117420, Russian Federation.

Gazprom Media Group is a Russian

media group of companies, the princi-

pal activities of which are TV and radio

broadcasting, advertising, publishing,

film production and distribution primar-

ily undertaken in the Russian Federa-

tion. As of 31 December 2010 the Group

owned 100% interest in Gazprom-Me-

dia Holding, the holding company of

Gazprom Media Group.

The group of industrial compa-

nies (machinery production) comprise

OMZ (Uralmash-Izhora) Group, Cryogen-

mash Group, Glazovskiy zavod Khim-

mash, Uralkhimmash Group, Uralener-

gomontazh Group, MK Uralmash Group,

REP Holding and certain other indus-

trial assets, which the Group acquired in

2008-2010. OMZ is the holding company

of the OMZ (Uralmash-Izhora) Group,

which produces nuclear power plant

equipment, speciality steels, machinery

equipment, manufacturing and mining

equipment. The OMZ Group manufac-

turing facilities are based in the Russian

Federation and the Czech Republic. As

of 31 December 2010 the Group effec-

tively controlled 46.31% of OMZ voting

stock (17,704,613 ordinary shares trans-

lating to the effective share of 56.37% of

OMZ Group).

In December 2010 the Group dis-

posed of a portion of its investment in

CJSC SIBUR Holding that resulted in a loss

of control by the Group over SIBUR Hold-

ing Group. SIBUR Holding Group is a ver-

tically integrated Russian petrochemical

group of companies involved in refining,

processing and distribution of petro-

chemical products and production and

distribution of tires. SIBUR Holding Group

operations and results from disposal are

presented as discontinued operations in

these consolidated financial statements.

As of 31 December 2010 the investment

in SIBUR Holding Group retained by the

Group is recognised as an investment in

associate held for sale. Comparative infor-

mation for the year ended 31 December

2009 was reclassified accordingly.

The summary consolidated financial

statements were authorized for issue by

the Management Board of the Bank on

20 April 2011.

b) Economic dependence

As o f 3 1 D e c e m b e r 2 0 1 0 ,

OAO Gazprom owned 41.73% of the

outstanding shares of the Group. A sub-

stantial portion of the Group’s funding is

from the Gazprom Group. As such the

Group is economically dependent on

the Gazprom Group.


69

Note 2 — Basis of presentation

a) General

These summary consolidated finan-

cial statements, which comprise the

summary consolidated statement of fi-

nancial position as at 31 December 2010,

the summary consolidated statements

of comprehensive income, changes in

equity and cash flows for the year then

ended, and related notes are derived

from the audited consolidated financial

statements of the Group.

The complete consolidated financial

statements are prepared in accordance

with International Financial Reporting

Standards (IFRS). These summary consol-

idated financial statements are derived

from the complete consolidated finan-

cial statements, except that substantially

all note disclosures are omitted.

Management is responsible for the

preparation of the consolidated financial

statements in accordance with the IFRS.

The preparation of consolidated fi-

nancial statements in accordance with

IFRS requires management to make

judgements and key estimates and as-

sumptions that affect the reported

amounts of assets and liabilities and

disclosures of contingent assets and li-

abilities at the date of the financial in-

formation and the reported amounts

of revenues and expenses during the

reporting periods. Actual results could

differ from those estimates. Key areas of

judgments and key assumptions con-

cerning the future and other key sources

of estimation uncertainty at the report-

ing date, that have a significant risk of

causing a material adjustment to the

carrying amounts of assets and liabilities

within the next financial year, include:

● estimation of allowance for im-

pairment losses for financial assets

measured at amortized cost. These

include mainly amounts due from

credit institutions, loans to custom-

ers, receivables and other assets. The

estimation of allowance for impair-

ment losses involves an exercise of

judgment and is based on internal

credit risk rating systems and statisti-

cal data

● valuation of complex and illiquid

financial instruments. Valuation of

complex and illiquid financial instru-

ments involves the exercise of judg-

ment and use of valuation models.

In the absence of an active market

management has to make assump-

tions in respect of appropriate inputs

used in valuation models, some of

which may not be based on observ-

able market data

● estimation of fair values of identifi-

able assets and liabilities acquired in

business combinations. Estimation

of fair values of identifiable assets

and liabilities acquired in business

combinations involves the exercise

of judgement and use of valuation

models, which among others include

assumptions about future business

performance and cash flows and ap-

propriate discount rates

● estimation of impairment losses for

non-financial assets. Estimation of

impairment losses for non-financial

assets involves the exercise of judge-

ment and use of valuation models,

which among others include as-

sumptions about future business

performance, estimation of cash

flows from assets assessed for impair-

ment and estimation of appropriate

discount rates

● decisions whether the Group ceased

to control a subsidiary as a result of

a sale of its stake in the subsidiary

that is subject to further regulatory

approval. Management considers all

relevant facts and circumstances, in-

cluding an assessment of the prob-

ability of obtaining such an approval,

and applies judgment to determine

whether the control over the subsidi-

ary is lost before the Group legally

transfers the ownership rights to

a third party.


70

b) Russian economic environment

The Russian Federation is experienc-

ing political and economic change that

has affected, and may continue to af-

fect, the activities of enterprises operat-

ing in this environment. Consequently,

operations in the Russian Federation

involve risks that typically do not ex-

ist in other markets. In addition, the

contraction in the capital and credit

markets and its impact on the Rus-

sian economy have further increased

the level of economic uncertainty in

the environment. These consolidated

financial statements reflect manage-

ment’s assessment of the impact of

the Russian business environment on

the operations and the financial posi-

tion of the Group. The future business

environment may differ from manage-

ment’s assessment.


71

Reference Information

GPB Branches and Representative Offices

Astrakhan

Established 3/22/1994

Address 12, Bldg.2 Vorobyova Drive, Astrakhan, 414057 2

Phone number: (851-2) 49-36-23

Head of the branch Gennadiy N. Sagunov

Barnaul


Address 20 Severo-Zapadnaya St., Barnaul, 656037

Phone number: (385-2) 36-15-13

Head of the branch Vyacheslav A. Neupokoyev

Belgorod


Address 36 Kostyukova St.,Belgorod, Belgorod Region, 308012, Russia

Phone number: (472-2) 58-82-92

Head of the branch Gennady N. Koptyaev

Bryansk


Address 4 Partizan square, Briansk, 241050

Phone number: (483-2) 74-59-17

Head of the branch Sergey V. Lomako

Vladivostok


Address 5a Uborevicha St., Vladivostok, Primorsky Territory, 690091

Phone number: (423-2) 65-08-35

Head of the branch Dmitry V. Gutnikov

REFERENCE INFORMATION

72

Volgograd


Address 34a Kozlovskaya St., Volgograd, 400074

Phone number: (844-2) 93-04-50

Head of the branch Larisa S. Turetskaya

Ekaterinburg


Address 134v Lunacharskogo St., Ekaterinburg, 620075

Phone number: (343) 355-58-00

Head of the branch Yan V. Tsenter

Izhevsk


Address 89 Krasnogeroiskaya St., Izhevsk, Udmurt Republic, 426034

Phone number: (341-2) 68-05-63

Head of the branch Alexander N. Zarubey

Irkutsk


Address 41 Sverdlova St., Irkutsk, Irkutsk Region, 664011

Phone number: (395-2) 28-31-82

Head of the branch Yury V. Gorshkov

Yoshkar Ola


Address 17 Uspenskaya St., Yoshkar Ola, the Republic of Marij El, Russia, 424000

Phone number: (836-2) 41-66-16

Head of the branch Oleg A. Ovsyannikov

Kazan


Address 3 Levo-Bulachnaya St., Kazan, Kazan, Republic of Tatrstan,420111, Russia

Phone number: (843) 221-73-01

Head of the branch Boris P. Pavlov

Kaliningrad


Address 5 Leninsky Avenue, Kaliningrad, Kaliningrad Region,236039, Russia

Phone number: (401-2) 30-52-00

Head of the branch Viktor E. Baranov


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Kemerovo


Address 3 Sobornaya St., Zavodskoy District, Kemerovo, Kemerovskaya Region, 650004

Phone number: (384-2) 34-50-90

Head of the branch Nelly D. Morozenko

Kostroma


Address 8a Sovetskaya St., Kostroma, 156000

Phone number: (494-2) 49-09-00

Head of the branch Yury A. Migachev

Krasnodar


Address 11 Dmitrievskaya Damba str., Krasnodar city, Krasnodar region, 350033

Phone number: (861) 210-48-00

Head of the branch Vladislav D. Tsyganesh

Krasnoyarsk


Address 87 Б Akademika Kirenskogo Str., Krasnoyarsk, Krasnoyarsk Territory, 660041, Russia

Phone number: (391) 274-58-00

Head of the branch Pavel G. Avdeev

Lipetsk


Address 49a Gagarina St., Lipetsk, 398002

Phone number: (474-2) 42-01-01

Head of the branch Vladimir R. Arustamov

Makhachkala


Address 24 Ermoshkina St., Makhachkala, the Republic of Dagestan, 367025

Phone number: (872-2) 67-53-45

Head of the branch Abdulatip M. Saypulaev

Murmansk


Address 15 Karla Marksa St., Murmansk Region,

Russia, 183025

Phone number: (815-2) 55-36-00

Head of the branch Mikhail K. Samotaev


74

GPB BRANCHES AND REPRESENTATIVE OFFICES

Nizhny Novgorod


Address 3, Bldg. 5, Piskunova St., Nizhny Novgorod, 603005 5

Phone number: (831) 421-82-00

Head of the branch Sergey A. Voskresensky

Novosibirsk


Address 2 Kavaleriyskaya St., Novosibirsk, 630105

Phone number: (383) 200-10-00

Head of the branch Namzhil N. Urbanaev

Novy Urengoi, the Tyumen Region


Address 4, 26-go S’ezda KPSS St., Novy Urengoi, Tyumen Region, 629300

Phone number: (349-4) 93-53-81

Head of the branch Larisa G. Khomyakova

Omsk


Address 20 Magistralnaya St., Omsk, 644088

Phone number: (381-2) 24-50-00

Head of the branch Elena P. Kholopova

Orenburg


Address 18 Pravdy St., Orenburg, 460000

Phone number: (353-2) 73-30-71

Head of the branch Elena S. Varnavskaya

Perm


Address 77a Maksima Gorkogo Str., Sverdlovsky district, Perm Perm Region, 614007

Phone number: (342) 219-00-55

Head of the branch Sergey V. Yaremchenko

Rostov-on-Don


Address 20/17 Voroshilovsky Ave., Rostov-on-Don, Rostov Region, 344006, Russia

Phone number: (863) 249-77-60

Head of the branch Olga N. Ogurtsova


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Samara


Address 191 Galaktionovskaya St. (through passage to 190 Samarskaya St.),

Leninsky District, Samara, 443001

Phone number: (846) 273-83-93

Head of the branch Alexey P. Anfimov

St. Petersburg


Address “A” 3, Proletarskoy Diktaturi Str., Saint-Petersburg, 191124

Phone number: (812) 301-99-99

Head of the branch Olga V. Dragomiretskaya

Saratov


Address 2/10 Valovaya St., Saratov, 410031

Phone number: (845-2) 39-06-02

Head of the branch Viktor I. Sverchkov

Stavropol


Address 419, Bldg. 2, Lenina St., Stavropol, 355012

Phone number: (865-2) 56-67-83

Head of the branch Valery V. Kostyukov

Surgut


Address 12 Svobody Blvd., Surgut, Khanty-Mansi Autonomous Area — Yugra,

Tyumen Region, 628417, Russia

Phone number: (3462) 24-49-80

Head of the branch Maxim E. Nigmatullin

Tomsk


Address 52 E Pushkina St., Tomsk, 634006

Phone number: (382-2) 61-00-63

Head of the branch Elena G. Novoselova

Tula


Address 106 Lenina St., Tula, 300026

Phone number: (487-2) 50-05-55

Head of the branch Valery V. Kuznetsov


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Tyumen


Address 62 Respubliki St.,

Tyumen, 625000

Phone number: (345-2) 46-51-91

Head of the branch Lyubov G. Dorokhova

Ufa


Address 138 Mendeleeva St., Ufa, the Republic of Bashkortostan, 450022

Phone number: (347) 256-67-80

Head of the branch Roza N. Urazgildeyeva

Ukhta


Address 25 30-Letiya Oktyabrya Str., Ukhta, the Komi Republic, 169400

Phone number: (821-47) 9-67-57

Head of the branch Yury A. Godovnikov

Khabarovsk


Address 46 Turgeneva Str., Khabarovsk, Khabarovsk Region, 680000, Russia

Phone number: (421-2) 41-69-59

Head of the branch Yury A. Korolev

Cheboksary


Address 2 Prospect Lenina, Tcheboksari,

Chuvash Republic, 428000

Phone number: (835-2) 30-30-10

Head of the branch Oleg L. Simunov

Chelyabinsk


Address 116 Krasnoarmeiskaya St., Chelyabinsk, 454091

Phone number: (351) 247-91-90

Head of the branch Alexander E. Grabovsky

Shchelkovo, the Moscow Region


Address 1-1a Proletarsky Ave., Shchelkovo, Moscow Region, 141100

Phone number: (495) 526-47-36

Head of the branch Vadim V. Lisakovich


77

Yugorsk, the Tyumen Region


Address 31 Lenina St., Yugorsk, Sovetsky District, Tyumen Region, 628260

Phone number: (346-75) 2-04-75

Head of the branch Roman R. Dubinsky

Yuzhno-Sakhalinsk


Address 38 Kurilaskaya St., Yuzhno-Sakhalinsk, Sakhalinsk Region, Russia, 693020

Phone number: (4242) 45-40-00

Head of the branch Vladimir I. Shapoval

Yakutsk


Address Floors 1& 2, 18 Ammosova St., Yakutsk, the Republic of Sakha, Yakutia 677000

Phone number: (411-2) 42-14-03

Head of the branch Albert Z. Egorov

Representative office in Beijing (China)

Established (registration date) 7/17/2006

Address 1801, Tower D, Central International Trade Centre, 6A, Jianguomenwai Dajie,Beijing, China,

100022

Phone number: (+86-10) 65 63 05 16

Head of the branch Alexander I. Kobin

Representative office in Ulan Bator (Mongolia)


Address P.O. Box 661, 6 Enkh Taivan, Ulan Bator, Mongolia, 14250

Phone number: (+976) 99 10 99 02

Head of the branch Valery A. Kislov

Representative office in New-Delhi (India)


Address 10 / 48 Malcha Marg, Diplomatik Enclave, Chanakyapuri,

New Delhi — 110021, Delhi, INDIA

Phone number: (+91) 11 2410 86 48

Head of the branch Alexey A. Sovko


78


Subsidiary and Affiliated Banks

Subsidiary Banks in Russia

Severgazbank Commercial Bank, Open Joint-Stock Company

Established on April 29, 1994

General license CB-RF No. 2816

GPB Group ownership 98.4%

Regional network 13 branches, 49 additional offices and 13 cash counters.

Address 3 Blagoveshchenskaya St., Vologda, 160001

Phone number: (8172) 57-36-00

Web site www.severgazbank.ru

Sibirgazbank Commercial Joint-Stock Bank, Closed Joint-Stock Company

Established on August 4, 1994

General license CB-RF No. 3042


Regional network 1 Supplementary Office

Address 1/1 Universitetskaya St., Surgut, Tyumen Region, 628400

Phone number: (3462) 502-502

Web site www.sibgazbank.ru

GPB-Ipoteka, Open Joint-Stock Company

Established on June 30, 1993

License for bank operations No. 2403


Address 14, Kolomensky proezd, Moscow, 115446

Phone number: (495) 223-40-40

Web site www.gpb-ipoteka.ru

Credit Ural Bank Open Joint-Stock Company

Established on November 25, 1993

General license CB-RF No.2584


Regional network 1 branch, 1 additional office, 1 lending-and-cash services office and 8 cash counters.

Address 17 Gagrina St., Magnitogorsk, Chelyabinsk Region, 455044

Phone number: (3519) 24-89-10

Web site www.creditural.ru


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Noyabrskneftekombank Commercial Bank, LLC

Established on March 3, 1993

General license CB-RF No.2274


Regional network 1 branch

Address 73 Sovetskaya St., Noyabrsk, the Yamalo-Nenets Autonomous District, Tyumen Region,

629807

Phone number: (3496) 35-30-01

Web site http://nnkb.tngs.ru/

Subsidiary and affiliated foreign banks

Belgazprombank Open Joint-Stock Company

Registered on November 28, 1997

General license No.8 of the National Bank of the Republic of Belarus


Regional network 8 branches, 57 additional offices and 125 cash counters.

Address 60/2 Pritytskogo St., Minsk, Republic of Belarus, 220121

Phone number: +7-10-(37517) 229-16-29

Web site www.belgazprombank.by

ARMENIAN-RUSSIAN EXPORT-IMPORT BANK Closed Joint-Stock Company

Registered on June 3,1998

License No.80 of the Central Bank of the Republic of Armenia


Regional network 15 branches

Address 12 Mger Mkrtchyana St., Erevan, Republic of Armenia, 375010

Phone number: (495) 411-74-85

+7-10-(37410)-54-89-12

Web site www.areximbank.am

Gazprombank (Switzerland) Ltd.

State registration certificate No.020.3.002.981-3 of September 25, 1992

License 92


De facto address: Zollikerstrasse 183, 8008 Zurich

Postal address Postfach 1274, CH-8032 Zurich

Phone number: +41 44 386 86 86

+7 495 956 75 52

Web site www.gazprombank.ch


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SUBSIDIARY AND AFFILIATED BANKS

Licenses, Permits, Certificates

● General License of the Bank of Russia No. 354, September 28, 2007

● License of the Bank of Russia for Precious metals trading No. 354, September 28, 2007,

● Russian Federal Financial Markets Service license No. 177-04464-000100, January 10, 2001, for depository activities

● Russian Federal Financial Markets Service license No. 177-04280-010000, December 27, 2000, for dealing activities

● Russian Federal Financial Markets Service license No. 177-04329-001000, December 27, 2000, for securities management

● Russian Federal Financial Markets Service license No. 177-04229-100000, December 27, 2000, for brokerage activities

● Russian Federal Financial Markets Service license No. 22-000-0-00021, December 13, 2000, for operating a specialized depository

of investment funds, unit funds and non-governmental pension funds

● Russian Federal Financial Markets Service No. 1327, February 25, 2009, for conducting business as an exchange intermediary.

● General License No. ЛГ0270900300360 issued on June 17, 2009, by the Ministry of Industry and Trade of the Russian Federation

(authorizing the export of gold in bars)

● General License No. ЛГ0270900300361 issued on June 17, 2009, by the Ministry of Industry and Trade of the Russian Federation

(authorizing the export of silver in bars)

● Certificate series 77 No. 004890355 issued by the Interregional Department of the Ministry of Taxation of the Russian Federation

on August 28, 2002 (OGRN)

● Certificate series 77 No. 010022158 issued by Moscow Interregional Inspectorate No.50 of the Federal Tax Service (INN/KPP)

● Certificate No. 354 evidencing the registration of the credit organization JSB Gazprombank (CJSC) with state authorities issued

by the Bank of Russia on November 13, 2001 (stamped by the Moscow Head Territorial Department of the Bank of Russia

on September 27, 2007)

● Certificate No. 629 issued by the State Corporation Deposit Insurance Agency on May 10, 2005

● Certificate No. 045 evidencing the registration of the organization

as a member of the National Stock Association, February 28, 2001

● Certificate of membership in PARTAD series А No. 0000193, April 29, 2004

● Notice from International Saint-Petersburg Inspectorate No. 9 of the Federal Tax Service dated November 17, 2006 (KPP)


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Contact Info

Full Name: GAZPROMBANK (Open Joint-Stock Company)

Abbreviated Name: GPB (OJSC)

Start of Business Operations: July 31, 1990

Legal Address: 117420 Moscow, 16 Nametkina St., bldg. 1

Place of business: 63 Novocheremushlinskaya St., Moscow

16 Raushskaya naberezhnaya, Moscow

Single Help Desk: (495) 913-74-74

Fax: (495) 913-73-19

Telex: 412027 GAZ RU

Web site: www.gazprombank.ru

E-mail: [email protected]

Swift Code: GAZPRUMM

Reuters Dealing code: GZPM

Correspondent Account: 30101810200000000823 with the Operating Department

of Moscow GTU of the Bank of Russia;

INN: 7744001497

kPP: 997950001

BIC: 044525823

OkPO: 09807684

OkvED: 65.12


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Annual Report 2010. IFRS Consolidated Financial Statements

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